BAKU, Azerbaijan, Nov. 23
By Zeyni Jafarov – Trend:
Azerbaijan's current account deficit in 2020 is projected at 1.4 percent of GDP based on current oil prices, Trend reports citing Fitch Ratings’ report.
The current account will return to a surplus of 3.8 percent of GDP in 2021 and 4.9 percent of GDP in 2022, and about 2 percent of GDP will be added through foreign direct investment from hydrocarbon expansion projects.
According to Fitch Ratings, the Azerbaijani government has announced its intentions to significantly increase investment in the infrastructure of the Nagorno-Karabakh region liberated from the Armenian occupation. So, in 2021-2022, capital expenditures for post-conflict reconstruction in Nagorno-Karabakh and adjacent districts of Azerbaijan will rise by 0.6 percentage points of GDP.
In addition, according to the report, Azerbaijan's public debt will remain very low until the end of 2020 and will amount to 23 percent of GDP at the end of 2020. The average price of Brent crude oil will fluctuate at $40 per barrel in 2020, $45 per barrel in 2021, and $50 in 2022.
Fitch Ratings has affirmed Azerbaijan's Long-term Local and Foreign Currency Issuer Default Ratings (IDRs) at 'BB+' with a negative outlook reflecting the impact of the combined shock caused by lower oil price and COVID-19 pandemic on Azerbaijan's external reserves.
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