Agency: Azerbaijan's economic growth in 2023-24 projected to be lower than in countries of region

17:07 - 24.11.2023

November 24, Fineko/ "The profile of financing of the banking system of Azerbaijan has strengthened. Since 2016, there has been no significant inflow of retail and corporate investments outside the country."

ABC.AZ reports that this is stated in S&P Global Ratings’ expectations on the banking sector of Azerbaijan.

The credit rating agency noted that the main deposits of customers will finance loans over the next few years, eliminating the need for external financing. The dollarization of deposits is gradually decreasing to regional levels, but remains significantly higher than that of loans. In addition, deposits of non-residents are significantly lower than in their regional countries, by 5%.

S&P added that Azerbaijan's economic growth prospects in 2023-2024 are projected to be lower than in most countries of the region. The pressure on growth prospects is mainly due to the long-term gradual decline in oil production. Low economic growth may also slow down the growth of the banking sector.

"However, in 2023 we expect an increase in lending and deposits in the banking sector of Azerbaijan by more than 10%," the rating agency said.

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