Fitch evaluates Azerbaijan's fiscal outlook, monetary policy

Azerbaijan's consolidated budget surplus is expected at 3.7% of GDP in 2026, Erich Arispe Morales, Senior Director and Head of Eastern Europe Sovereigns at Fitch Ratings, said during the "Fitch on Azerbaijan 2026" event in Baku, Report informs.

According to his forecast, the figure will decrease in subsequent years - to 1.3% of GDP in 2027 and to 0.7% of GDP in 2028.

"Government debt will fall to 19.6% of GDP in 2026, reach 19.8% of GDP in 2027, and increase to 21.6% of GDP by 2028," the senior director of the agency emphasized.

As Morales points out, Azerbaijan demonstrates positive results in refining monetary policy instruments and increasing the contribution of the non-oil sector to the national economy, while economic growth dynamics and the level of inflation remain the main challenges for the country. According to the expert's assessment, the Central Bank of Azerbaijan significantly increased the adaptability and effectiveness of liquidity management, despite constraining circumstances such as significant dollarization and the insufficient depth of the domestic financial market.

"Recently, we observed actions by the regulator to ease the parameters of the interest rate corridor in order to stimulate credit activity, and overall the Central Bank acted effectively, continuing the development of monetary tools," Morales stated.