In 2023 consumer price inflation in Azerbaijan will slow to 9.5% year-on-year from an estimated annual average of 13.0% in 2022, Report informs, citing Fitch Solutions.
“Given that price pressures are set to remain high, we do not expect any monetary policy easing in 2023 with the central bank refinance rate remaining at 8.25%,” Fitch Solutions said.
“Meanwhile, we expect private consumption to remain the main component of GDP making up close to 52.0% from the expenditure side. We expect this component to experience slower growth of 3.5% in 2023 following an estimated full year growth of 4.5% in 2022.
“While pent-up demand following the pandemic has meant that private consumption has likely remained particularly strong over 2022, some data suggest that the momentum will slow. For instance, real wage growth is slowing once again following a recovery in the first half of 2022
Meanwhile, after a strong post-pandemic recovery in 2021, credit growth to households has started to plateau, no doubt due to the Azerbaijani central bank’s tightening its policy rate amid rising inflation.”