Fitch: Strong external balance, low government debt support Azerbaijan's credit rating

Azerbaijan's sovereign rating stands at "BBB-" with a "stable" outlook, supported by strong external economic indicators and low government debt, Erich Arispe Morales, Senior Director and Head of Eastern Europe Sovereigns at Fitch Ratings, said during "Fitch on Azerbaijan 2026" in Baku, Report informs.

According to the agency representative, very strong external balance, the lowest government debt in its peer group, and significant financial flexibility provided by large assets of the State Oil Fund of Azerbaijan (SOFAZ) remain the key strengths of the country's credit profile.

At the same time, constraining factors for the rating include relatively weak governance indicators, an immature regulatory framework for economic policy, high dependence of the national economy on the hydrocarbon sector, and remaining geopolitical risks, Morales noted.

He added that Fitch applies a two-stage approach to sovereign ratings, combining its Sovereign Rating Model (SRM) - which incorporates structural, macroeconomic, public finance, and external parameters - with a qualitative overlay to capture factors not fully reflected in the model.