S&P: Azerbaijan's liquid assets expected to reach 79.4% of GDP by 2025

Azerbaijan's liquid assets are expected to grow in 2024 and 2025, according to a forecast from the international ratings agency S&P Global Ratings.

S&P projects that the proportion of Azerbaijan's liquid assets in its gross domestic product will rise from 69.1% in 2023 to 78.7% this year, Caliber.Az reports per local media.

By 2025, the figure is anticipated to reach 79.4%. The agency predicts that liquid assets will account for 76.9% of GDP in 2026 and 74.2% in 2027.

To recap, liquid assets, or cash equivalents, are assets that can be quickly converted into cash without a significant loss in value. They are highly tradable and include cash, government bonds, stocks, and certain securities commonly held in investment portfolios.

For individuals, liquid assets are vital for financial security. They allow for quick access to funds for unexpected expenses, emergencies, or investment opportunities without selling other assets at a loss. They also act as a financial safety net during times of instability.

For businesses, maintaining liquid assets is crucial for operational efficiency. They cover short-term expenses such as wages, rent, debt repayments, and inventory costs while also supporting growth, strategic investments, and daily operations. Insufficient liquidity can lead to cash flow problems and hinder business stability and growth.

Effectively managing liquid assets is essential for financial stability and navigating economic challenges for both individuals and businesses.

By Aghakazim Guliyev