The Central Bank expects 8 percent, an independent economist expects double-digit inflation
Azerbaijan The Central Bank said that annual inflation is expected to be around 8 percent in 2023 if the assumptions of the base scenario remain stable. Last year, it was announced that inflation was officially around 14 percent. However, according to independent economists, it is not less than 40 percent.
According to the forecasts of the International Monetary Fund, the level of global inflation will drop from 8.8 percent to 6.6 percent.
“All over the world inflation growth is weakening”
National Member of the economic policy, industry and entrepreneurship committee of the Assembly Rufat Guliyev “Turan“a said that in the budget documents of 2023 inflation 6.9 percent stated: “All over the world inflation growth rates are weakening. World Bank experts predict that it is around 4-6 percent. But here experts say that we are talking about nominal inflation.”
According to him, the classic scheme of fighting inflation consists of increasing the discount rate: “We are also raising the discount rate. This increases the value of money and leads to a contraction of the money supply in the country. At the same time, certain tax the policy is implemented to weaken the growth of inflation. On the other hand, the Ministry of Finance has an anti-circulation policy. All this has its effect.”
He added that the state dollars and tries to maintain manat parity: “Considering all this, it is possible for inflation to decrease to 8 percent. But even though the state regulation has its results, the main role in the fight against inflation is the abundance of locally produced goods and services. In this meaning village loans for agriculture, small and medium businesses should be more accessible.
“Buying is down”
Economist Rashad Hasanov also told RFE/RL that in 2023, the reduction of inflation both in the world and in Azerbaijan will be a natural process: This is called the “base effect”. In 2022, there was a sharp price increase, after which the market moved towards a new equilibrium. Because purchasing has decreased, opportunities are limited, and companies are forced to be more cautious in their pricing policy.”
According to the expert, although inflation in 2023 will decrease compared to last year, it is more likely that it will be double-digit: “Because during the past period, the index of production prices has increased more – the cost of products has increased to a greater extent, and we mean this on all products, we can see. These increases have not been transformed into the market, the process is not completely finished, such pressure remains.”
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