BAKU, Azerbaijan, January 17. Improvements in
Azerbaijan’s monetary policy framework promote stability in
external position, Trend reports via Moody’s.


“Azerbaijan's ratings, including its Baa3 long-term issuer
ratings, are supported by the government's large net creditor
position given sizeable financial assets held by the State Oil Fund
of Azerbaijan (SOFAZ), the country's sovereign wealth fund, which
provides a significant financial buffer and lowers government
liquidity and external vulnerability risks. Its policy
effectiveness is also improving, although from a low base. In
particular, improvements in the monetary and macroeconomic policy
framework promote stability in the external position and financial
system soundness in the face of shocks, while effective deployment
of fiscal buffers allows for countercyclical spending and limits
the potential deterioration in the government's fiscal and debt
metrics,” reads the latest report by Moody’s.


The rating agency notes that Azerbaijan's economy maintained
positive growth in 2025 amid lower global oil prices, albeit at a
slower pace as compared to 2024.







“Real GDP grew by 1.6% year-on-year over the first eleven months
and we expect full year growth to be around 1.5%. This performance
reflects resilience in non-oil activities, which helped offset the
persistent contraction in the oil and gas sector. Meanwhile, we
expect softer oil prices and increased expenditure to result in a
narrowing of the consolidated fiscal surplus - which includes the
revenues and expenditures of the Nakhchivan region, various
social-related funds, and the State Oil Fund of Azerbaijan (SOFAZ)
- to about 2.4% of GDP in 2025 from 4% in 2024. The state budget is
likely to record a mild deficit, driven by accelerated spending on
infrastructure, reconstruction, and social programmes. The
relatively narrow state deficit will keep the government's debt
burden well contained below 30% of GDP as targeted by the latest
medium-term fiscal framework, remaining significantly lower than
the median for similarly rated peers,” the report reads.