The US-based rating agency Standard and Poor’s has forecasted Azerbaijan’s GDP to grow averaging 3.7 percent over the period of 2021-2023.

According to the report, the country’s GDP growth in 2021 is expected to be 2.9 percent, in 2020 - 5 percent, and in 2023 - 3 percent.

The growth will be supported by a recovery in domestic consumption aided by fiscal stimulus and higher hydrocarbon exports.

Moreover, the initial phase of the large Shah Deniz II gas field project was launched in July 2018 and since then Azerbaijani gas has been supplied to Turkey. Thus, the agency anticipates that the gas exports will gradually rise as the project reaches full capacity over the next four to five years. The agency forecasts the Azerbaijani gas to reach Europe after the third quarter of 2020, which should strengthen broader economic dynamics.

Furthermore, it is forecasted that crude oil production will resume to 2019 levels after April 2020, when the current OPEC+ production deal is terminated.

Azerbaijan derives more than 40 percent of its GDP, 50 percent of government revenue, and more than 90 percent of exports from the hydrocarbon sector. This makes the country's economy vulnerable to sharp volatility in oil prices and global demand.

Additionally, it is projected that external balances will revert to an average surplus of about 4 percent of GDP, supported by a recovery in hydrocarbon prices and a gradual increase in crude oil production. The launch of the SDII gas project and its expansion over the next few years should also support external performance.

Standard & Poor's is a subsidiary of American corporation McGraw-Hill, engaged in analytical research of financial markets. The company belongs to the three most influential international rating agencies, known primarily as the creator and editor of the American stock index S & P 500. Since April 28, 2016 it has been called S&P Global Ratings.

Standard and Poor’s agency traditionally carries out an assessment of Azerbaijan’s credit rating twice a year, in January and July.