Azerbaijan Government to Develop Anti-Inflation Program

Business Materials 14 November 2007 13:33 (UTC +04:00)

Azerbaijan, Baku / corr Trend I.Khalilova / The Azerbaijan Government plans to develop an anti-inflation program, based on the economic results of 2007 and monetary policy parameters for 2008, said Elman Rustamov, the chairman of the Managing Board of the National Bank of Azerbaijan (NBA), during the discussions over a 2008 public budget draft at the Milli Majlis.

The program will institute measures for keeping the growth rate of inflation at a single digit.

Rustamov said that the increase of oil prices makes a multilateral impact on the consumption prices in Azerbaijan. Over the past 4 years, oil prices have risen times four. "In the past it was even less than $10 per barrel, leading to a considerable deficit in the public budget," Rustamov said.

The NBA chairman said that the price of oil is a major source for establishing currency reserves. Azerbaijan exports oil, but imports consumer goods with a growth in prices worldwide.

According to the payment balance methodology, after six months, the rate of inflation in Azerbaijan was approximately 8%. When considering that after 10 months in 2007, the growth rate of inflation exceeded 13%, the rate of inflation plays a considerable role in this process.

As a result of the increased energy resource prices in January 2007, the rate of inflation at 6.4%. The international report excludes administrative expenses from the inflation rate. Nevertheless, Rustamov considers the growth rate of consumer prices in Azerbaijan high and it does not suit the Government.