BAKU, Azerbaijan, July 17. Economic engagement
between Azerbaijan and Armenia is improving connectivity in the
South Caucasus, says Moody’s.
“Growing economic engagement between Azerbaijan and Armenia,
progress on regional transport corridors, and continued
international backing for the peace process are gradually improving
regional connectivity and reducing geopolitical risks despite the
absence of a formally ratified peace treaty,” the rating agency
said in its latest report.
Moreover, Moody’s analysts point out that Azerbaijan's fiscal
strength reflects a commitment to medium-term non-oil fiscal
consolidation, which has led to the narrowing of the non-oil
primary deficit through stronger non-oil revenue mobilization and
more moderate expenditure growth as spending on reconstruction of
conflict-affected regions tapers.
“At the same time, Azerbaijan's substantial fiscal buffers
managed by SOFAZ continue to grow (reaching 97% of GDP in 2025) and
remain among the largest relative to GDP across similarly rated
sovereigns. We expect higher oil prices in 2026 to generate
windfall gains, through higher hydrocarbon revenues and further
accumulation of SOFAZ assets, strengthening the government's
shock-absorption capacity and preserving ample fiscal flexibility.
Meanwhile, geopolitical dynamics have become more supportive,” the
report reads.
The data from the State Customs Committee of Azerbaijan reveals
that Azerbaijan exported goods worth $17.129 million to Armenia in
January-June 2026.
Meanwhile, more than 36,000 metric tons of grain, nearly 8,000
metric tons of fertilizer, 1,136 metric tons of propane, 133 metric
tons of aluminum and 414 metric tons of anthracite have been
transported from Russia to Armenia through Azerbaijan.
