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.