The international rating agency Fitch has revised Azerbaijan’s long-term foreign and local currency issuer default rating (IDR) outlook from “negative” to “stable” and confirmed the rating at BB+. Commenting on the development, Vusal Qasimli, Executive Director of the Center for Analysis of Economic Reforms and Communication, noted that the upgrade aligns with recent reports by the World Bank, the Davos Economic Forum, and the U.S. IRIS Fund, reflecting Azerbaijan’s improved positioning: “All major global rating institutions now recognize the tangible results of economic reforms under President Ilham Aliyev and identify Azerbaijan as the most reform-oriented country in the CIS.”

V. Qasımlı highlighted that over the past two years, both Standard & Poor’s and Fitch have raised Azerbaijan’s credit ratings, demonstrating growing global confidence in the Azerbaijani economy. He outlined six key benefits of the upgraded rating:

1. More favorable borrowing conditions: Higher ratings reduce borrowing costs for the state. S&P assigned BB+ stable, Moody’s confirmed Ba2 stable, and Fitch upgraded to BB+ stable. Credit ratings provide international investors with a measure of Azerbaijan’s repayment capacity.

2. Positive impact on the balance of payments: Higher ratings encourage capital inflows while discouraging outflows.

3. Expanded access to international financial markets: Both the state and private companies can more easily tap global capital.

4. Support for manat stability: Fitch projects the manat/USD exchange rate will remain at around 1.7 for the next two years.

5. Development of the securities market: Improved ratings enhance investor confidence and activity.

6. Acceleration of foreign participation in privatization: Higher ratings attract foreign investors to local projects.

Qasımlı emphasized that Fitch’s upgrade further confirms President Aliyev’s forecast of 2018 as a year of strong economic growth in Azerbaijan. He also noted:

• All three major rating agencies have changed the outlook from negative to stable, signaling lower risk of downgrade and potential for future upgrades.

• Consensus across multiple agencies strengthens investor confidence.

• Azerbaijan now ranks among the top-rated countries in the CIS, surpassing Turkey and comparable to Kazakhstan and Russia in terms of creditworthiness.

• There is potential to further raise the rating to investment grade.

According to Trading Economics, which consolidates ratings and financial indicators on a 100-point scale, Azerbaijan leads in the CIS alongside Kazakhstan and surpasses BRICS countries such as Russia, Brazil, India, and South Africa. Azerbaijan’s rating category also includes countries like Italy, Poland, Iceland, Lithuania, and Malaysia.

Positive trends are already visible in the financial sector: stable manat, declining inflation, reduced dollarization, increasing bank profitability, and capital injections—all outcomes of ongoing financial and banking reforms contributing to improved credit ratings.

V. Qasımlı concluded that under President Aliyev’s leadership, diversification into non-oil industries, agriculture, and services, continued infrastructure development, transcontinental transport-logistics and energy projects, and the irreversible nature of economic reforms have opened a new chapter of sustainable economic growth. “The new economic model designed by President Aliyev serves as a global example.”