S&P Global Ratings international rating agency has forecasted that the credit portfolio of banks in Azerbaijan will increase by approximately 15% in 2025, APA-Economics reports citing the rating agency.
It was noted that credit growth in Azerbaijan is correlated with oil prices. Credits increased by 18% in 2021-2024. Total growth of credit portfolio is spurred by high growth rates in consumer loans.
“Private sector leverage in Azerbaijan remains the lowest among peers, with household debt to GDP of 14% and corporate debt to GDP of 10%. From March 1, 2025, the central bank will require an additional counter-cyclical capital buffer of 0.5%, considering that the credit gap indicator (the deviation of the credit-to-GDP ratio from its long-term trend) exceeds 2%,” the agency noted.
S&P has also added that inflation-adjusted housing prices are expected to increase by approximately 5%-10% in 2025.
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