BAKU, Azerbaijan, October 22. The average inflation rate in Azerbaijan in 2022 is expected at 13.7 percent, falling to 9.7 percent in 2023, and to 6.8 percent in 2024, Trend reports, citing the data from Fitch Ratings.
However, as the agency noted, this is still above the target of the Central Bank of Azerbaijan (CBA) of 4 percent, and the projected 'BB' median of 4 percent as well.
According to the report, “inflation rose 15.6 percent year-on-year in September, fuelled by a 21.8 percent rise in food prices, exacerbated by disrupted imports from Russia and Ukraine”.
As Fitch noted, monetary policy is weak and the interest rate was raised by only 50 basis points this year to 7.75 percent, although there was a tightening of liquidity due to reserve requirements and expansion of CBA liquidity.
Meanwhile, the outlook on Azerbaijan's Long-Term Foreign-Currency Issuer Default Rating (IDR) has been revised to ‘Positive’ from ‘Stable’ and affirmed at 'BB+'.
“The rating is supported by Azerbaijan's very strong external balance sheet, the lowest public debt in the peer group, and financing flexibility from large sovereign wealth fund assets,” Fitch said.
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