BAKU, Azerbaijan, February 17. The international rating agency Fitch Ratings predicts that the surplus in oil prices over the levels envisaged in Azerbaijan's budget, together with the growth of non-oil revenues, will contribute to maintaining a surplus in the state budget despite the increase in expenses for the restoration of territories liberated from occupation, Trend reports.
"According to our estimations, the consolidated budget surplus will increase to 7.8 percent of GDP in 2023. Despite this, Azerbaijan has postponed for one year (until 2027) the targeted reduction of the non-oil primary deficit to 17.5 percent of non-oil GDP (from 25 percent in 2023) as part of its fiscal rule to take into account expenditure obligations related to Karabakh and defense," the information of the agency notes.
To note, Fitch Ratings affirmed Azerbaijan's long-term foreign currency Issuer Default Rating (IDR) at 'BB+' with a 'Positive' outlook.
The rating is underpinned by a very strong external balance sheet, the lowest public debt among comparable countries, as well as the flexibility of financing through large assets of sovereign wealth funds.
The positive projection reflects the continued strengthening of external and fiscal buffers due to higher-than-budgeted energy prices, as well as the prospect of tighter spending restraint in the energy sector.
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