Azerbaijan to reap benefits from increased EU demand: Fitch Solutions

Fitch Solutions, the international credit ratings agency, predicts that energy exports will remain the primary catalyst for growth in Azerbaijan in the forthcoming years, Azernews reports.

The agency anticipates that although energy exports may not match previous levels of strength, they will continue to drive growth. Additionally, the government's efforts to diversify the economy away from the oil and gas sector will persist in the coming years.

Fitch Solutions suggests that as Europe seeks to reduce its reliance on Russian energy trade, Azerbaijan is expected to experience increased demand from the EU.

The agency foresees a more stable growth trajectory for Azerbaijan over the next decade, with an average growth rate of 3.1%, compared to 1.7% recorded between 2012 and 2022. Energy reserves, particularly gas, will remain a significant driver of growth, with Europe projected to be a key consumer of Azerbaijani energy.

Oil revenues have historically constituted a significant portion of Azerbaijan's GDP, making up nearly 30% since 2005 and contributing over 75% of government revenues in recent years. Fitch Solutions predicts that the proportion of GDP attributed to oil is likely to remain high in the foreseeable future.