Central Bank of Azerbaijan cuts inflation forecast for 2024

Economy Materials 1 May 2024 10:27 (UTC +04:00)
Kamran Gasimov
Kamran Gasimov
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BAKU, Azerbaijan, May 1. Annual inflation in Azerbaijan is expected to be within the target (4±2 percent) in 2024 and 2025, Trend reports via the Central Bank of Azerbaijan (CBA).

According to the April forecasts of the CBA for this year, annual inflation is expected to be 3.5 percent, whereas 2025 is expected to be 4.2 percent.

It is emphasized that the April forecast has been lowered compared to the January forecast.

"The inflation risk balance has not shifted significantly since the last meeting. Geopolitical tensions, barriers along critical international trade routes, climate change, global commodity price changes, and inflation rates in partner countries continue to be the key causes of foreign-driven inflation risk. Nonetheless, the expectation of continuing tight global monetary conditions and a more moderate approach to interest rate cuts by major central banks in the medium term is likely to suppress global inflation. Conversely, domestically, the principal risk of inflation escalation stems from the activation of local cost pressures, alongside government spending and excessive growth in overall demand. Taken together, the potential upsides and downsides of inflation largely offset each other. Annual inflation is projected to fall within the target range (4±2 percent) for both 2024 and 2025 if current conditions persist (April forecast: 3.5 percent for 2024 and 4.2 percent for 2025)," the CBA said.

To note, the UN predicts an average annual inflation rate of 5.9 percent for Azerbaijan in 2024 and 3.9 percent in 2025. Meanwhile, the ADB forecasts 5.5 percent for 2024 and 6.5 percent for 2025, whereas the WB anticipates rates of 2.2 percent for 2024 and 2.3 percent for 2025.

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