Boost to Azerbaijan’s Investment Options

Good news is potentially on the horizon for Azerbaijan.  According to experts the country looks set to move from a “stable” to a “positive” status suggesting the country will become “an investment-grade territory” in the very near future.  This is within the backdrop of the country showing general improvements vis-à-vis the government’s fiscal and external positions.  This has been most noted in the country’s acquisition of State Oil Fund of Azerbaijan’s assets.

<h3>Other Great Economic Stats</h3>

Simultaneous to this good financial news for the country is the fact that its government “registered a fiscal surplus of 14 percent of GDP in its consolidated budget,” a substantial change from its figure in 2010 of 30 percent.  Further, the government has been  making investments in other (non-oil based) sectors which are likewise starting to reap benefits with a 7.9 percent jump last year, more than double of the figure for the year before.

<h3>Need for Economic Freedom</h3>

While this of course is all great news for Azerbaijan, the country is still a long way from becoming a true global economic player.  Before that has even a hope of happening, the country  will be forced to engage in some major renovations and liberations of its economic structure.  Further the country’s securities need to be worked on which will take some efforts from its PashaBank vis-à-vis a portfolio diversification.  Because it plans on joining the overseas capital markets, there is an expected 5-y percent worth of profits from operations with securities this year.  Currently the bank’s investment portfolio stands at 31 percent of securities assets (bonds, etc.).  Experts have noted that the country needs to make it a priority to show its interest in “investing in sovereign bonds of foreign countries….particularly in Russia, Ukraine and Central Europe.”

Financial things are a-changing in Azerbaijan, that’s for sure.  But it’s going to take time.  There are a lot of economic factors that are beginning to work well in the country but its deeper political issues (i.e. the required infrastructure reform) is still a subject with which to contend.

Comments are closed.