Central Bank of Azerbaijan lowers inflation forecast for 2021 (UPDATE)
Details added: first version posted on 15:43
BAKU, Azerbaijan, Dec. 18
By Zeyni Jafarov - Trend:
Inflation in Azerbaijan will make up nearly 3 percent by the end of 2020 and will vary in the range of 3.5-4 percent by 2021, Trend reports referring to the Central Bank of Azerbaijan.
According to the CBA, amid low aggregate demand due to the pandemic and a deficit in aggregate output, the annual inflation rate in November was 2.4 percent, which is below the center of the target range.
Changes in prices for the main subcategories of the consumer basket demonstrate different dynamics. Food inflation was 0.4 percent in November and 3.9 percent in the past 12 months.
The dynamics of food inflation was also influenced by a growth in world food prices by 6.5 percent year on year.
The Central Bank also noted that stability remains in the non-food and service components of inflation, which is mainly due to a decrease in consumer demand. Prices for non-food products rose 0.1 percent over the past month, and services - 0.9 percent. The annual change in prices for non-food products and services amounted to 1.2 and 1.1 percent, respectively.
Inflation expectations vary in different directions by sector. Based on the monitoring of real sector enterprises in November of this year, inflationary expectations, taking into account the non-oil industry (mainly due to the textile and clothing subsectors) and trade, decreased, in the service sector, the growth trend remained in the negative zone, but in the construction sector it practically didn’t change.
The CBA stressed that generally inflationary expectations for all economic entities formed close to the actual indicators.
According to the December survey among households, the proportion of respondents expecting a higher rate of price growth over the next year lowered by 13 percentage points to 12 percent compared to September 2020.
The dynamics of inflation corresponds to the projected trajectory for the recent months and is formed mainly under the influence of mitigating factors.
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