April 19 (Bloomberg) -- Azerbaijan had its sovereign debt rating raised to investment grade by Moody’s Investors Service, which cited an improvement in the Caspian nation’s public finances and efforts to reduce dependence on the oil industry.
The rating was raised one step to Baa3 from Ba1 and was given a stable outlook, Moody’s said today in a statement. That puts Azerbaijan at the same level as Latvia, Iceland, Romania and Croatia.
“High oil prices have helped the government accumulate considerable foreign assets” in both the State Oil Fund and central bank reserves, Moody’s said. “High government spending on upgrading Azerbaijan’s infrastructure and developing new industries helped non-oil sector output expand by 9.4 percent last year, up from 7.9 percent in 2010.”
Azerbaijan’s economy expanded 0.5 percent from a year earlier in the first quarter, President Ilham Aliyev said April 16, the Azartac news service reported. Excluding the oil industry, gross domestic product rose 7.7 percent, state-run Azartac said.
In the first two months of the year non-energy industries generated 43 percent of GDP, the statistics office data show.
Rising government revenue should support the further diversification of the economy, Moody’s said.
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