Fitch puts Azerbaijan’s state budget surplus in 2023 at 4.8% of GDP

ECONOMICS  01 April 2023 - 13:42

Azerbaijan’s state budget surplus will fall to 4.8% of GDP in 2023 from 6% in 2022, Report informs, citing the international rating agency Fitch Ratings.

The agency expects this figure to drop to 4.2% of GDP in 2024.

“The general government surplus rose 2pp in 2022 to 6% of GDP (and compares with a deficit of 6.5% in 2020) driven by a 27% increase in revenue. Expenditure rose 14.5% in 2022, well below nominal GDP growth (which was boosted by a 37% deflator) and the non-energy primary fiscal deficit fell to 22.7% of non-energy GDP, outperforming the fiscal target of 25%,” reads the report.

Fiscal rules reintroduced last year target a further narrowing in the non-energy primary deficit to 17.5% in 2026, and cap public debt at 20% of GDP, but they lack institutional underpinnings.

“Moderating nominal GDP growth will make the deficit target more challenging, and its consistent adherence would provide greater confidence that Azerbaijan's strong public finances will be preserved. Fitch forecasts general government debt, which fell 4.5pp in 2022 to 11.6% of GDP, ends 2024 at 7.9% of GDP.”

Caliber.Az