Fitch renews its inflation forecast on Azerbaijan

Fitch forecasts a further interest rate rise to 7.6% by the end of 2021.

Inflation rose to 8.5% in September, from 4.3% in April, with pressure from food, transport, and administered prices, Report informs, citing the Agency.

"We project inflation moderates to 4.3% by end-2022, just above the 4% central target band, as temporary pressures including from supply chain disruptions fade," the Agency said in a statement.
Fitch forecasts a further 50bp interest rate rise to 7.5%.

According to the State Statistics Committee, in January-October 2021, the consumer price index in Azerbaijan amounted to 105.7% compared to the same period last year, including for food products, drinks and tobacco products - 106.7%, non-food products - 104.6% , tariffs for paid services to the population - 105%.

According to forecasts of the Central Bank, the average annual inflation in Azerbaijan by the end of 2021 is expected at the level of 6.2-6.5% against 2.8% in 2020. Annual inflation is expected at 9.5-10.5%. In 2022, the CBA forecasts average annual inflation to slow down to 5.6%.