New Debt Policy in Azerbaijan: Hopes, Realities, Risks and Perspectives

Abstract

From the second half of 2014, Azerbaijani public debt increased considerably along with several new challenges facing the domestic economy. During this period, the ratio of foreign debt to GDP rose from 8.6% (01.01.2015) to 22.8% (01.06.2018). The increase was 3.4 billion US dollars in nominal terms. At the beginning of 2018, Azerbaijan’s public debt amounted to 10 billion 100 million US dollars, while the value of loans taken with state guarantees reached 12 billion 682 million US dollars, raising the ratio of debt to GDP to 55%. The increase in the debt burden, particularly external debt liabilities, has caused concern both in the local community and in the government. Specifically, the deterioration of the financial situation of publicly-funded state institutions has raised the likelihood that the debt burden on this category will turn into a fiscal burden. As a result, the “Medium and long-term strategy for public debt management in the Republic of Azerbaijan” was approved on 24.08.2018.