Moody's credit rating - March 2011.
Moody’s increases outlook on Azerbaijan’s government bond ratings to positive and indicates unlikeliness of internal crises in country. Increased the sovereign rating of Azerbaijan to positive from stable and keeping assessment of the rating itself at the level of Ba1. The international rating agency informs that this rating action was taken as a result of significant improvements in the government’s fiscal and external positions, reflected in the rapid accumulation of financial assets in the State Oil Fund of Azerbaijan (SOFAZ) ; and ongoing government efforts to invest in the non-oil sector.Concurrently, Moody’s changed the outlook on Azerbaijan’s Baa2 foreign and A3 local-currency debt ceilings and its Ba2/Baa1 foreign and local-currency deposit ceilings to positive from stable. Moody’s improved outlook on Azerbaijan’s government bond ratings reflects significant improvements in the country’s fiscal and external accounts, which have strengthened due to the recovery in oil prices in 2010 and the prudent management of the revenues from those increases. The government registered a fiscal surplus of 14% of GDP in its consolidated budget, while the current account surplus was 30% of GDP in 2010. Most of the surpluses were saved in SOFAZ, whose assets grew by USD 8 billion to USD23 billion between the end of 2009 and the end of 2010, in addition to which the Central Bank’s foreign reserves increased by USD1.6 billion to USD7 billion.
Fitch's Credit Rating
May 28, 2010 - The international credit rating agency Fitch Ratings has announced that they have upgraded Azerbaijan's sovereign credit ratings.
Fitch have upgraded Azerbaijan's long-term foreign and local currency Issuer Default Ratings (IDRs) to 'BBB-' from 'BB+'. The credit rating agency adds that the outlooks on both ratings are stable. Fitch has also upgraded Azerbaijan's Country Ceiling to 'BBB-' from 'BB+' and upgraded its short-term foreign currency IDR to 'F3' from 'B'.
In a press release from Fitch, the international credit rating agency states:
"Fitch believes the fiscal rule that limits the annual expenditure of oil revenues to a level consistent with the "permanent income" from the oil endowment is appropriate. The agency also draws comfort from the transparency of the SOFAZ [the State Oil Fund that leads on EITI], underlined by Azerbaijan being the first country to be fully compliant with the international Extractive Industries Transparency Initiative."
How strong is their economy?
One of the most successful hydrocarbon based economies.
Azerbaijan withholding taxes on deposit interest
Azerbaijani President Ilham Aliyev has issued an executive order on the enactment of the law “On the Exemption from Tax of Interest Incomes earned on Individual Deposits held by Banks and Other Institutions”.Under the order, the Cabinet of Ministers is tasked to bring the existing legislative acts in line with the law within two months.
According the law, interest incomes earned on individual deposits held by banks and other institutions shall be exempted from tax for another three years from January 1, 2010.
