BAKU, Azerbaijan, June 6. Azerbaijan’s sovereign foreign-currency assets are projected to rise to $93 billion in 2026, equivalent to 117 percent of the country’s forecast GDP, according to a new assessment by Fitch Ratings, which has affirmed Azerbaijan’s Long-Term Issuer Default Rating (IDR) at 'BBB-' with a Stable Outlook, Trend reports.
The agency said the rating continues to be underpinned by Azerbaijan’s exceptionally strong external balance sheet, the lowest government debt burden among its rating peers, and substantial financial flexibility derived from large sovereign wealth fund assets.
Fitch expects higher oil prices, supported by ongoing geopolitical tensions in the Middle East, to strengthen Azerbaijan’s hydrocarbon revenues and further boost the country’s external position. Of the projected $93 billion in sovereign foreign assets, around 84 percent will be held by the State Oil Fund of Azerbaijan (SOFAZ), while the remainder will be maintained within the international reserves of the Central Bank of Azerbaijan.
As a result, Azerbaijan’s net sovereign foreign assets are forecast to reach 73 percent of GDP, the highest level among countries rated in the ‘BBB’ category.
Current Account and Budget Surpluses to Remain Strong
According to Fitch, elevated energy prices coupled with moderate import growth will increase Azerbaijan’s current account surplus to 9 percent of GDP in 2026, compared with an estimated 4.6 percent in 2025.
Although the agency anticipates lower oil and gas prices in 2027, it expects the current account surplus to remain stronger than those of most peer economies, allowing the country to continue accumulating foreign-exchange assets, albeit at a slower pace.
On the fiscal side, Fitch forecasts the consolidated budget surplus to expand to 5.6 percent of GDP in 2026 before moderating in 2027. The expected decline reflects assumptions of softer hydrocarbon prices, moderate growth in non-oil revenues, and broadly stable public spending.
The agency noted that government expenditure priorities are likely to remain focused on national defense and the reconstruction of territories regained by Azerbaijan.
Fiscal Reforms Seen Supporting Long-Term Stability
Fitch also highlighted improvements in Azerbaijan’s fiscal policy framework.
Under the government’s 2027–2030 fiscal strategy, which is based on an oil price assumption of $65 per barrel, authorities aim to reduce the non-oil primary deficit to 13 percent of GDP by 2029, down from 18.6 percent in 2025 and 22.2 percent in 2022.
The agency said recent and planned adjustments to the fiscal framework—including tighter constraints on revisions to medium-term fiscal targets and the government’s intention to gradually reduce budget transfers from SOFAZ—could help curb the pro-cyclical nature of fiscal policy.
Such measures, Fitch added, would lower the risk of macroeconomic imbalances, enhance policy predictability, and support the continued accumulation of sovereign external assets over the medium term.
