Finance

Home page

Finance

S&P: Azerbaijan has the lowest private sector debt level in region

14 February 2026 12:40 (UTC +04:00)

The private sector debt-to-GDP ratio in Azerbaijan is approximately 26%, which is lower than in Georgia, Armenia, and Uzbekistan and in line with the levels in Kazakhstan and Kyrgyzstan, APA-Economics reports, citing the international rating agency S&P Global Ratings.

According to the agency’s assessment, Azerbaijan also has the lowest share of foreign currency lending in the region. As of the end of 2025, foreign currency loans accounted for approximately 16% of total lending.

Based on S&P’s forecasts, credit growth in Azerbaijan is expected to slow to 10–12% in 2026, in line with the 2025 level. For comparison, the average annual growth of the loan portfolio over the previous four years was about 18%.

The agency added that although economic growth is expected to weaken against the backdrop of stagnation in oil and gas production, the share of stage 3 problem loans in the system in accordance with International Financial Reporting Standards (IFRS) will remain stable in the range of 4.5–5%.

According to S&P's assessment, in 2026, credit costs under national standards will be formed at the level of 1.1–1.4%. The agency emphasized that since the requirements for allocating reserves under national standards are stricter than under IFRS, a significant reduction in the volume of reserves by Azerbaijani banks is not expected after the banks' transition to IFRS 9.