Moody’s positively evaluates financial reforms in Azerbaijan

By Azernews

By Rasana Gasimova

Azerbaijan has held a stable position at Ba2 in the latest Moody’s rating agency report, the Financial Market Supervisory Authority of Azerbaijan (FIMSA) has stated.

According to the report, the reforms in Azerbaijan’s financial sector were aimed at reducing the credit risk of the population and restoring lending.

Moody’s rating agency emphasized Azerbaijan's status of a net creditor for big foreign assets and the country’s effort to ensure domestic political stability by redirecting oil and gas revenues to other sectors. The rating agency believes that these traits indicates the country's credit reliability.

The report also noted that reforms carried out in the fiscal and financial sectors may increase the stability of Azerbaijan's sovereign credit reliability against shocks, as well as reduce the government’s debt as well as risks in the banking system.

Moody’s also stressed the growth of loans as a positive trend in the country’s financial sector. According to the agency, lending to individuals and institutions has been increasing since December 2018.

Note that Moody’s rating agency regularly assesses the financial reforms in Azerbaijan. The government’s initiative to address the problem loans was highly appreciated in the Moody’s previous report.

In its latest reports, the agency said it expects a three-percent acceleration of economic growth in Azerbaijan in 2019-2020, taking into account favorable world prices for energy resources, export growth and an increase in the share of the non-oil sector in the structure of the economy.

According to the agency's experts, the ongoing economic growth and unprecedented state support for households are the main factors that influenced the assignment of a positive forecast for the banking sector of Azerbaijan.