BAKU, Azerbaijan, September 22. Asian Development Bank (ADB) forecasts Azerbaijan’s inflation rate to be double digits in 2022, ADB’s Chief Economist Albert Park told Trend.
“We expect energy prices and inflation in most regions to remain high in 2022 and moderate somewhat next year, partly due to lower demand given slower global growth,” he said.
According to the chief economist, in the US, inflation peaked at 9.1 percent earlier this year and has now started to come down. In Europe, it has also reached over 9 percent, but it is not really clear what the direction will be, given the difficulty in substituting Russian energy.
"In Asia, inflation has been more modest. The region relies more on rice; that is why food inflation has been quite moderate," he said.
As Park explained, the inflation spike that has been seen all over the world is due to increased commodity prices.
“Energy and food prices have been the catalyst, but a real concern is if those prices start to lead to higher price expectations, higher wages, and production cost increases. So, if inflation starts to spread to other goods, this is when it gets more difficult. We are strongly recommending that central banks all over the world be very vigilant in monitoring the inflation situation and avoid falling behind the curve,” he noted.
As the ADB’s chief economist thinks, Azerbaijan is in a better position than most countries, due to the increase in budget revenue.
“The goal in Azerbaijan is to look beyond the current situation and prioritize longer-term objectives. The main goal is to diversify from oil revenues as the main source of economic production, and there are some promising signs. It looks like non-oil activities have been growing rapidly lately. And there are plans to set up new industrial parks and to support non-oil production in different ways. This is a correct orientation,” he said.
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