Middle Corridor boosts Azerbaijan's economic strength, says Moody's

International rating agency Moody's highlighted the impact of the Middle Corridor on Azerbaijan's economic resilience and its role as a crucial link between Europe and Asia.

"Investments across Azerbaijan are driving economic prospects, though the full impact on economic strength will materialize gradually," analysts note, per Caliber.Az.

Moody's affirmed Azerbaijan's sovereign rating at Ba1 with a positive outlook, attributing this to the growing activity on the Trans-Caspian International Transport Route, or the Middle Corridor. This route is becoming pivotal in the transportation and logistics sectors, fostering solid performance. The increasing significance of this corridor as an alternative trade route between China and the EU is expected to bolster economic diversification.

The agency's analysts noted that a robust transport and logistics sector could generate positive spill-over effects throughout the economy, enhancing Azerbaijan's resilience to economic shocks and bolstering its credit profile. They highlighted the potential for economic diversification to broaden government revenue sources and foreign exchange earnings over time.

The Trans-Caspian International Transportation Route spans China, Kazakhstan, the Caspian Sea region, Azerbaijan, Georgia, Türkiye, and beyond into Europe. Cargo volume along this route surged to 2.7 million tons in 2023, marking an 86% increase from 2022, with projections suggesting it could exceed 4 million tons in 2024.