Russian bank predicts inflation slowdown in Azerbaijan

Russia’s Gazprombank forecasts inflation in Azerbaijan at 8% in 2023, and 7% in 2024, Gulnara Khaidarshina, deputy head of research, chief CIS economist at Russia’s Gazprombank, said after the meetings held in the Central Bank of Azerbaijan (CBA), Report informs.

“The peak of inflation has been passed and is expected to decelerate by year end. Inflation continued to decelerate in April to 12.8% YoY, down by 1.3 pps vs. the peak level seen in September 2022. The CBAR noted that external inflationary pressure continues to weaken. In addition, global food prices are decreasing: according to the UN, their growth rate slowed to 0.8% MoM in April (-1.3 pps vs. March),” she said.

“The expansion of aggregate demand amid fiscal stimulus continues to pose inflationary risks. The CBAR confirmed its year-end inflation forecast presented in early February and stated that inflation is still expected to decelerate to 8% YoY.”

According to the World Bank estimates, the average annual inflation in Azerbaijan is expected to reach 8.5% in 2023 and 6.2% in 2024.

According to the results of 2022, the average annual inflation in Azerbaijan amounted to 13.9%, and in December last year on an annualized basis to 14.4%.