S&P downgrades Azerbaijan to BB+/B

Standard & Poor’s said it lowered its long- and short-term foreign and local currency sovereign credit ratings on Azerbaijan to BB+/B from BBB-/A-3.

The outlook on the long-term ratings is stable.

The downgrade follows the agency’s most recent revision of oil price assumptions. Azerbaijan depends heavily on the hydrocarbons sector; it represented about 40% of GDP and 95% of merchandise exports in 2013-2014.

S&P now expects the economy will contract by 1% in 2016 as exports decline and consumption falls in the wake of the sizable devaluation of the Azerbaijani manat at the end of last year.

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