Moody's upgrades Azerbaijan ratings to "Ba1", outlook stable

BAKU. Aug 8 (Interfax) - Moody's Investors Service has upgrade its long-term issuer rating and unsecured rating assigned to Azerbaijan from "Ba2" to "Ba1".

The outlook on the ratings was changed from positive to stable, the agency said in a press release.

The upgrade reflects the effectiveness of economic policy in recent years, expressed in better fiscal management and greater ability to absorb future shocks, Moody's said. Despite the pandemic, fiscal performance remains strong and is improving faster than expected, thanks to prudent fiscal management amid economic recovery and high hydrocarbon prices. Moody's believes that the government's anti-inflationary measures and the active macroeconomic policy of the Central Bank of Azerbaijan will contain inflationary risks.

Moody's expects a healthy current account surplus in Azerbaijan over the next few years of 15-20% of GDP due to high hydrocarbon prices, higher oil production quotas under the OPEC+ deal and growth in gas exports.

Moody's expects Azerbaijan's real GDP will grow 4% in 2022. Having demonstrated resilience during the coronavirus pandemic, leading to a smaller recession than comparable countries and maintaining a stable currency, Azerbaijan met the Russian-Ukrainian crisis with strong economic recovery backed by high hydrocarbon prices, the agency said.