S&P lowers Azerbaijan view to negative

S&P said it revised the outlook on the long-term sovereign credit ratings on the Republic of Azerbaijan to negative from stable.

The agency also said it affirmed the country’s BB+ long-term and B short-term ratings.

The outlook revision primarily reflects the more persistent risks due to Azerbaijan’s weak economic performance, S&P said.

The country’s economy is now expected to contract by 3% in 2016 before recovering to about 3% economic growth after 2017, the agency said.

Negative implications are assumed on the country if the anticipated recovery does not materialize, S&P explained.

The agency said the country is vulnerable to declining living standards and reduced fiscal flexibility as authorities are pressed to hike spending for social or political reasons.

This also could put additional strain on the already vulnerable banking system, S&P said.

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