Fitch expects Azerbaijan's strategic foreign exchange reserves to rise to 117% of GDP

Fitch Ratings has affirmed Azerbaijan's Long-Term Issuer Default Ratings (IDR) at 'BBB-' with a Stable Outlook.

Report informs, citing the agency, that the ratings are supported by Azerbaijan's very strong external balance sheet, the lowest public debt in its peer group, and financing flexibility from large sovereign wealth fund assets.

"Higher oil prices derived from the Middle East conflict will boost oil and gas revenues, leading to a rise in sovereign foreign-currency assets to USD93 billion (117% of projected GDP) in 2026 (84% held by the Sovereign Wealth Fund of Azerbaijan; SOFAZ) with the remainder in the Central Bank of the Republic of Azerbaijan's (CBRA) international reserves. Net sovereign foreign assets will reach 73% of GDP, the highest among 'BBB' peers," the agency said.

It noted that higher oil prices, combined with moderate import demand will lift the current account surplus to 9% of GDP in 2026 from 4.6% of GDP in 2025. Lower oil and gas prices will lower the current account surplus in 2027, but this is likely to remain higher than peers and support continued, albeit more moderate, FX assets accumulation.

"After rising to a projected 5.6% of GDP in 2026, we expect that the consolidated budget surplus will decline in 2027 reflecting lower oil prices, moderate growth in non-oil revenue, and relatively stable expenditure, as the government continues to prioritise defence and rebuilding of recovered territories," the agency analysts said.

Azerbaijan's strategic foreign exchange reserves amounted to $87.9162 billion as of May 1, 2026. This represents a 15% increase compared to May 1 of the previous year.

According to the State Statistics Committee, the country's foreign exchange reserves increased by $2.7651 billion in April.

At the end of 2025, Azerbaijan's strategic foreign exchange reserves were estimated at $85.1 billion.