The Asian Development Bank (ADB) has predicted that the average annual inflation rate in Azerbaijan will be 2.1% in 2024 and 3.8% in 2025.
The “Report” reports on this with reference to the September edition of the ADB’s “Asian Development Prospects” (ADO) report released today.
In the previous report in April, inflation expectations were 5.5% and 6.5%, respectively.
The ADB believes that the effects of continued restrictive monetary policy have contributed to the decline in inflation.
“The slowdown in global commodity price growth and declining inflation in Azerbaijan’s main trading partners, coupled with high interest rates, reduced the average annual inflation rate from 12.7% in the first half of 2023 to 0.7% a year later.
“Food prices fell by 0.6%, but other goods rose by 1.2% and services by 2.4%,” the report said.
In light of the decline in inflation, the Central Bank of Azerbaijan has reduced the main interest rate from 7.75% to 7.25% in four stages from January to July 2024.
As noted by the report’s authors, although the increase in administrative fuel prices since late June is expected to lead to an increase in inflation in the second half of 2024, the annual inflation level is expected to be lower than previously anticipated, given the very low inflation in the first half of the year. Accordingly, inflation forecasts for 2024 and 2025 have been lowered compared to the ADB’s April edition.
It is worth remembering that in 2023 the average annual inflation in Azerbaijan was 8.8%.
According to government forecasts, inflation in Azerbaijan will be 2.7% in 2024 and 4.6% in 2025.
