S&P assesses impact of Russian-Ukrainian conflict on economy of Azerbaijan

Although it presents several uncertainties, beyond the oil price channel, the Russia-Ukraine conflict's effects on Azerbaijan's economy appear contained so far, Report informs, citing the statement of S&P Global Ratings on the affirmation of long-term and short-term foreign and local currency sovereign credit ratings of Azerbaijan at the level of "BB+/B".

"Russia is Azerbaijan's largest trade partner on the import side, accounting for 20% of total goods imports, out of which wheat is the largest single item. Before the war, Ukraine contributed 4.5% of imports. Even though the conflict has contributed to higher inflation, including for food, there do not currently appear to be broader implications for Azerbaijan, such as widespread supply chain disruptions or unavailability of some goods," S&P says.

According to the rating agency, there is some anecdotal evidence of Russian citizens relocating to Azerbaijan or moving their funds, but the macroeconomic effect of this is insubstantial so far.

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