Baku: S and P Global Ratings international rating agency has forecasted that the credit portfolio of banks in Azerbaijan will increase by approximately 15% in 2025, APA-Economics reports citing the rating agency.

According to Azeri-Press News Agency, it was noted that credit growth in Azerbaijan is correlated with oil prices. Credits increased by 18% in 2021-2024. Total growth of the credit portfolio is spurred by high growth rates in consumer loans.

The report highlights that private sector leverage in Azerbaijan remains the lowest among peers, with household debt to GDP at 14% and corporate debt to GDP at 10%. From March 1, 2025, the central bank will require an additional counter-cyclical capital buffer of 0.5%, considering that the credit gap indicator, which is the deviation of the credit-to-GDP ratio from its long-term trend, exceeds 2%.

S and P has also added that inflation-adjusted housing prices are expected to increase by approximately 5%-10% in 2025.