Moody's Ratings, one of the world's leading international rating agencies, upgraded the sovereign credit rating of the Republic of Azerbaijan to investment grade (from Ba1 to Baa3) on July 3, 2025, and maintained the rating outlook as "positive". This result shows that Azerbaijan is demonstrating a more stable economic position in the region. At a time when geopolitical and economic challenges are increasing globally, this decision by Moody's confirms that confidence in our country has strengthened, and as a result of successful economic policies, Azerbaijan has become an even more attractive destination for international investors.

Latif Zeynalli, Leading Advisor to the Strategic Planning Department of the Center for Analysis of Economic Reforms and Communication, Doctor of Philosophy in Economics, said that the consistent and systematic steps taken in the country to reduce the dependence of the economy and fiscal policy on the oil and gas sector, increase the efficiency of monetary policy, regulate the financial sector, as well as strengthen transparency and accountability in public administration have led to significant improvements in the quality of economic management in Azerbaijan. These measures not only maintain the current macroeconomic stability, but also strengthen the institutional framework and support the transition to a sustainable economic development model. Optimization of monetary policy serves to manage inflation expectations and maintain financial stability, while making fiscal policy less dependent on oil revenues increases budget sustainability. Prudential regulatory and supervisory mechanisms adopted in the financial sector strengthen support for the real sector by increasing the liquidity and risk tolerance of the banking system. In particular, increasing transparency and accountability in public administration, ensuring open information flow in the decision-making process, and efficient management of public resources lead to strengthening institutional capacity. The inclusion of these factors in Moody's rating forecast demonstrates Azerbaijan's increasing credibility with international financial institutions and strengthening its long-term economic prospects.

Latif Zeynalli emphasized that the growth observed in the fields of logistics, construction and tourism stimulates the revival and diversification of the country's non-oil sector. Growth in these areas is directly related to the strengthening of Azerbaijan's position as a transit and trade center. Strengthening the geostrategic position, especially on the Middle Corridor, is accelerating regional and global integration by turning Azerbaijan into one of the main transport and logistics hubs between the East and the West. At the same time, the steps taken by the country to realize the potential of renewable energy sources, especially solar and wind energy, serve to form a green economy and achieve sustainable development goals. Green energy initiatives implemented in this context are of strategic importance not only from an ecological but also from an economic perspective. The restoration of the Karabakh and East Zangezur regions and the reintegration of these areas into the country's economy also play an important role in the development of the non-oil sector. Infrastructure projects carried out in these regions, the reconstruction of agricultural and industrial potential, as well as their formation as a green energy zone are among the main priorities in Azerbaijan's long-term development agenda. Involving the aforementioned regions in economic activity has a positive impact not only on regional, but also on national economic growth as a whole.

At the same time, the continued efficient use of oil and gas revenues, the increase in the financial reserves of the State Oil Fund and the reduction of the state budget's dependence on transfers from this fund significantly strengthen Azerbaijan's fiscal sustainability. This approach allows both to maintain financial discipline and to form strategic reserves for future generations. Increasing reserves and increasing the share of non-oil revenues in the budget structure, in addition to strengthening the country's resilience to external shocks, serve to ensure flexibility in fiscal policy and long-term macroeconomic stability. Against this background, the fiscal framework based on the principles of effective management of the State Oil Fund's assets and transparency acts as an important tool in terms of economic security. The structural stability resulting from the reduction of dependence on oil revenues and the targeted use of these funds creates an important basis for improving the investment climate and ensuring the sustainability of state finances. This can also be considered an important component of Azerbaijan's long-term economic strategy.

The CAERC employee added that, in general, the complex reforms and strategic projects undertaken towards the sustainable and inclusive development of the Azerbaijani economy serve to increase the country's influence in international financial markets, ensure macroeconomic stability, and strengthen long-term prospects, as well as being a clear indicator of the international recognition of its economic potential and management quality.