Moody's forecasts that Azerbaijan's GDP growth will slow to 1.0% in 2015, based on an assumption of oil prices averaging $55 per barrel this year, and that growth will only recover to 1.7% in 2016.
Slower economic growth can be partially offset by government spending initiatives backed by a sizable pool of accumulated foreign-currency reserves (70% of GDP as of year-end 2014), says the reports.
"Developments in the non-oil economy are the principal determinants for the banks' operating environment, and, as such, dictate the evolution of bank performance," says Maria Malyukova, a Moody's Analyst and author of the report.
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