Azernews.Az

Ulviyya Poladova

Read more

International rating agency Fitch Ratings has affirmed Azerbaijan’s Long-Term Foreign-Currency Issuer Default Rating (IDR) at "BBB-" with a Stable Outlook, AzerNEWS reports.

According to the agency, Azerbaijan’s sovereign foreign currency assets are expected to reach $93 billion in 2026, equivalent to 117 percent of the country’s projected GDP.

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.

The agency estimates that Azerbaijan’s net sovereign foreign assets will reach 73 percent of GDP, the highest level among countries in the "BBB" rating category.

Fitch forecasts that higher oil prices combined with only a moderate increase in imports will help raise the current account surplus to 9 percent of GDP in 2026, compared with 4.6 percent in 2025. Although oil and gas prices are expected to decline in 2027, the agency believes the surplus will remain above the average of similarly rated countries and will continue contributing to the growth of foreign exchange reserves.

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.