BAKU, Azerbaijan, September 19. International rating agency Fitch has highlighted significant improvements in Azerbaijan’s banking sector since 2017, Trend reports.
“Average banking sector metrics have improved, with reduced loan dollarisation and a decline in legacy asset-quality risks,” Fitch noted in its latest report.
At the same time, the agency pointed to potential challenges. “The rapid expansion of retail lending since 2021 could pose overheating risks. However, the Central Bank of Azerbaijan is taking proactive measures to mitigate credit risks in this subsector,” the report stated.
In addition, Fitch provided updated forecasts on the country’s economy. “We project Azerbaijan’s GDP growth to decelerate to 3.5 percent in 2025 and 2.5 percent in 2026, from 4.1 percent in 2024,” the agency said, adding that the main reason is “a slowdown in the oil and gas sector amid lower global prices.”