Baku: Azerbaijan’s budget and current account balance are projected to remain in surplus for the year, according to Allianz Group. The international insurer and asset management group has assessed Azerbaijan’s public and external financial indicators as generally satisfactory.
According to Azeri-Press News Agency, citing Allianz Group, the fiscal and current account surpluses are experiencing a decline, yet they remain in positive territory. The fiscal surplus is anticipated to decrease to about 2% of GDP by 2026, primarily due to weakening oil revenues and increasing social expenditures. The stability of the country’s banking sector is also highlighted, with credit growth continuing to support business activity. However, rising financing costs are exerting pressure on banks’ profitability.
Allianz also noted that there has been no significant rise in company bankruptcy indicators. Nonetheless, weakening investment and tighter global financial conditions could elevate corporate default risks, particularly among small companies. Furthermore, if oil prices persist at approximately USD 60 per barrel, it could result in payment delays to suppliers within the energy sector. External debt remains low at less than 10% of GDP, and sovereign risks are limited. However, the country’s reliance on hydrocarbons for fiscal and export revenues remains a structural vulnerability.