Mikayil Jabbarov outlines plans to prevent price rise

The only way to minimize the impact of future price increases is to create a complete food production value chain across the country, Economy Minister Mikayil Jabbarov said, as quoted by Report.

In his view, there are favorable opportunities for creating import-substituting industries for products that depend on imported components.

"Improving the efficiency of the state support mechanism for the development of small and medium-sized businesses will lead to an even greater increase in the share of participation in employment of these business entities, especially young entrepreneurs. One of the main goals of the government in the coming period is the rapid development of the processing industry, which creates high added value. Given the specifics of the regions, it is planned to deepen the specialization in the production and processing of products. In regions, it is planned to accelerate the reconstruction and privatization of non-working or unprofitable manufacturing enterprises. As a whole, investment stimulation mechanisms will be widely used to develop the sectors of production of goods and services," the minister said.

Mikayil Jabbarov stressed that Azerbaijan is a part of the world economy and, as a result, feels the influence of the processes observed in the world markets.

“Over recent years, the world has seen a sharp rise in prices for all food products without exception. To do this, it is enough to pay attention to the information of the Food and Agriculture Organization of the United Nations on the growth of world prices for raw materials, including food. The observed price increases are the highest in the last 30 years. There are many processes that contribute to the rise in prices, and their dynamics, unfortunately, is only increasing. One of the main reasons for the rise in prices in the domestic market of our country is the rise in prices for imported products from foreign markets. At the same time, due to the rise in prices for imported raw materials, prices for domestic products also began to rise. Unfortunately, we import raw materials for production. It is necessary to take into account the growth of expenses that form the cost of production - transport, energy, raw materials, etc."

He recalled that for 9 months of 2021, the import price index increased by 21.5% compared to the same period last year.

“The index of import prices for finished food products, alcoholic and non-alcoholic beverages, vinegar, tobacco products and their substitutes increased by 25.1%. According to estimates, in January-October 2021, inflation was 5.7% compared to the corresponding period last year, mainly due to the fact that the consumer price index for food products was 6.7%. Thus, there is objective pressure on the consumer price index in the domestic market," Jabbarov said.

According to Jabbarov, for this purpose, the State Service for Antimonopoly Policy and Consumer Market Supervision under the Ministry of Economy conducts regular monitoring of prices for various goods on the market.

"The rise in prices for goods is taking place not only in our country, but also in other states. In particular, this process is accelerating in the countries - the main trade partners of Azerbaijan. According to estimates, in the near future, higher inflation compared to Azerbaijan is predicted in our main partners, such as Russia, Turkey, Kazakhstan, Georgia, Ukraine and Iran. Food security will continue to be a global priority for the whole world. Ensuring the country's food security is the number one task," he said.

The minister noted that the Azerbaijani government is taking all the necessary steps to minimize the impact of rising prices, and the state budget for 2022 was formed taking into account the component of increasing the income of the population.

“We believe that this will be some support in the face of rising prices. A positive point is that in the forecasts of international organizations on the price index for goods and food for 2022, there is a relative, and in the countries-main trading partners of Azerbaijan - a partial decrease compared to 2021 in the consumer price index,” the economy minister said.