ING Group: Normalisation with Armenia could boost investment in Azerbaijan

Normalisation of diplomatic ties between Azerbaijan and Armenia could unlock new investment opportunities for Baku, according to a recent economic review by ING Group, the Netherlands’ largest financial institution.

The review highlights that international investors are responding positively to the ongoing peace efforts between the two countries. Analysts suggest that sustained progress in normalisation could lead to increased foreign capital inflows into Azerbaijan’s economy, Caliber.Az reports per local media.

This optimistic outlook comes as major credit rating agencies continue to express confidence in Azerbaijan’s financial position. Following Fitch Ratings, Moody’s has also reaffirmed Azerbaijan’s investment-grade rating at Baa3, maintaining a positive outlook. Moody’s cited the country’s strengthened fiscal and external buffers, along with the potential for improved regional stability, as key factors behind its decision.

Despite these encouraging developments, Azerbaijan’s trade balance is facing headwinds due to volatility in global oil markets. Over the 12 months ending in May 2025, the country’s foreign trade surplus dropped to $2.7 billion, down from $5.5 billion in 2024 and a much higher $16.6 billion in 2023.

Analysts note that Azerbaijan’s economy remains highly sensitive to oil price fluctuations. A change of just $1 per barrel in oil prices is estimated to impact the country’s annual fuel export revenue by approximately $350 million.

Still, analysts argue that growing capital inflows and improved sovereign ratings are helping to cushion the impact of oil market instability. The investment-grade ratings assigned by both Moody’s and Fitch bolster Azerbaijan’s reputation as a reliable and attractive partner for global investors.