Azerbaijan's foreign debt increases to 21% of GDP at end-April

By bne IntelliNews June 15, 2016

Azerbaijan's foreign public debt stood at $7.45bn as of the end of April, making up 21% of the country' GDP, the foreign ministry said on June 14. The debt-to-GDP share increased from 19.8% at the start of the year.

Oil and gas-rich Azerbaijan has prided itself throughout the years for its low foreign debt levels. However, the decline in oil prices since 2015 and a double devaluation of the Azerbaijani manat has led to an increase in its foreign debt. The debt accounted for only 12.5% of economic output at the end of November.

Azerbaijan has tapped into international capital markets through the issuance of two rounds of Eurobonds in the last year, and will need additional financing to the tune of $8bn for a large-scale gas exploration and transport project, Shah Deniz II.

So far, Eurobond issuance account for 17.7% of the debt or $1.3bn, while the rest are external loans.

According to the ministry's report, the foreign debt consists of direct state obligations and contingent liabilities from sovereign guarantees. The largest lenders to Azerbaijan are international financial institutions - the World Bank, the Asian Development Bank (ADB), the Islamic Development Bank (IDB), the European Bank for Reconstruction and Development (EBRD) and the Japanese International Cooperation Agency. 

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