Middle Corridor Dev't Helps Improve Sovereign Creditworthiness Moody's

(MENAFN- Trend News Agency) BAKU, Azerbaijan, September 12. The Middle Corridor's increasing prominence has helped improve selected sovereigns' credit fundamentals. Economic prospects have strengthened, reflected through an acceleration in real GDP growth in Azerbaijan, Kazakhstan and Georgia, the corridor's three key economies, boosted by the transport and logistics sectors, Trend reports via Moody's.

“Increasing infrastructure investments are also benefiting the wider economy through higher construction activity and employment. Manufacturing has attracted foreign investment for products like locomotives, but also for higher-value added sectors such as automobiles, pharmaceuticals and food processing for both the domestic and export markets. Efforts to improve the corridor's green credentials through rail electrification and renewable energy integration have boosted investment in renewables, attracted by the region's solar potential, and wind potential in the Caspian Sea,” the rating agency said in its latest report.

Moody's experts believe that these investments are helping diversify the economy, particularly in hydrocarbon reliant Azerbaijan and to a lesser extent, Kazakhstan, increasing their resilience to oil price volatility. Non-oil real GDP growth has been robust in recent years, even offsetting falling production from the hydrocarbon sector.

The Middle Corridor is a transport and trade route that passes through several countries in the region, connecting Asia with Europe. It serves as an alternative to the traditional Northern and Southern corridors.

The route begins in China and goes through Central Asian countries such as Kazakhstan, Uzbekistan, and Turkmenistan. It then crosses the Caspian Sea, Azerbaijan, Georgia, and Türkiye before reaching Europe. The Middle Corridor is a land-based route that bypasses longer maritime paths, linking the eastern parts of Asia, including China, with Europe.

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