Anti-inflation measures of Azerbaijan Government Influence Reduction of Inflation Growth

Business Materials 14 February 2008 15:58 (UTC +04:00)

Azerbaijan, Baku, 14 February /corr. Trend I.Khalilova / According to the information by the National Bank of Azerbaijan (NBA), in January the index of the consumer prices made up 15.3% compared to 17% in January 2007, a source stated at the NBA.

Such growth of inflation last year was explained through the increase of prices for energy resources, tariffs for communal services, transport services, and only as a result of anti-inflation measures, it was possible to maintain the inflation at 16.7% in 2007.

Recently the Head of the NBA, Elman Rustamov, said that there are plans to significantly increase the issue amount of T-bills to remove excessive money mass because it is one of the tools to prevent inflation. However, according to forecasts, this year inflation is expected at level of 13-14%, several Government representatives optimally state that it will be possible to maintain it at a level of 10%.

In general, the Government of Azerbaijan intends to strengthen economic and administrative measures to avoid an artificial price increase.

Azerbaijan's Minister of Economic Development, Heydar Babayev, considers that currently the prices are not determined by the domestic market, but by global pressures which grow more intense throughout the world economy. According to the International Finance Organization, the prices for the imported non-oil products rose by 24%.

According to International Finance Organization (IFO) estimations, the prices of imported oil products increased by 24%. The growth rate of inflation totaled 16.7% at the end of 2007. "We cannot influence price-cutting for imported goods in the world markets with monitoring or with administrative measures," Babayev said. "We can only prevent the artificial rise in the prices," he said.

The anti-inflation measures include exerting strong control over the use of the investing program and the yield of the state securities which are expected to be raised within the government's monetary policy. Moreover, the fight against monopolization which influences the consumer market, and the artificial rise in the prices, is planned to be strengthened within the administrative measure.