Rovshan Agayev: 94% of Azerbaijan`s public debt is foreign currency


January 29, Fineko/abc.az. Expert economist Rovshan Agayev has sounded his opinion in connection with the renewal of the rating of Azerbaijan as a country and SOCAR as a company, which may be useful.

ABC.AZ reports that according to the expert, the ratings of international agencies are compiled both directly about the state itself and its individual subject.

According to Agayev, the introduction of the fiscal order, the entry into force of the debt strategy and the targeting of the non-oil budget deficit are defined as positive steps.

Agayev also gave a forecast for the future and told about expectations: "The expectation is that relatively low oil prices and higher social spending in 2020-2021 will lead to decrease in the fiscal surplus to 4.2% of GDP -whereas in 2019 this figure was about 6%. The ratio of external debt to GDP makes up 18.9% that is much lower than the current limit (38.4%) for ‘BB’ level.

But the debts taken under governmental guarantee and considered a "conditional obligation" are larger, and their share in GDP makes up 31%. That is, taking this indicator into account, the share of public sector debt to GDP is 50%.

According to the report, contingent liabilities are mainly related to International Bank’s debts and gas projects. 94% of the national debt is foreign currency that is much higher than the current level of ‘BB’ (60.7%)."