Moody's changes outlook on Azerbaijan's banking system to stable
Moody's Investors Service's outlook for Azerbaijan's banking system has been revised to stable from negative.
Moody's also expects that the loan portfolio of Azerbaijani banks in 2018 will grow by 5 to 10%.
According to the agency, the resumption of economic growth is likely to cause a gradual increase in demand for loans, mainly due to the growth of loans to the population. Nevertheless, dynamics of corporate lending in 2018 will remain weak.
Moody's predict the growth of the economy of Azerbaijan at the rate of 1.5% in 2018, and at the rate of 3% in 2019.
"The favorable external environment - the average oil prices amounting to $54 in 2017 compared to $44 in 2016, the stability of the national currency and the decline in inflation led to a gradual recovery of the economy of Azerbaijan. We expect Azerbaijan's GDP growth rate in 2018 and 2019 to be 1.5 and 3%, respectively. This is conditioned by the further increase in oil prices and the growth of exports of Azerbaijani products," the agency's analysts noted.
According to the State Statistics Committee of Azerbaijan, the country's GDP in January-June 2018 amounted to almost 37,01 billion manat, which is 1.3% more than in the same period of 2017.
At the end of the reporting period, the GDP produced in the non-oil sector of Azerbaijan increased by 2% compared to 1H2017, and the oil and gas sector saw an increase of 0.1%.