Azerbaijan, Baku, May 14 / Trend N. Ismayilova /
NGO center of economic research prepared several proposals to prevent deflation in Azerbaijan, the center deputy chairman Vusal Gasimli said on May 14.
"First, it is necessary to prevent deflation of prices for local goods and tariffs for services. It is necessary to limit anti deflation actions that can lead to growth of import volume," Gasimli said.
Plan of actions directed to prevent deflation includes such measures as regulation of loan rates on the market in accordance with rate of the Central Bank, conduct bank stress-tests to reveal needs of banks in capital and money injections, partial and soft reduction of real effective rate of manat, elimination of barriers hampering appearance of agricultural production on the market, introduction of guaranteed prices, as well as acceleration of production oriented on export and import replacing products.
According to the center experts, such factors as stability of real rate of manat and its rising in price towards several currencies, deflation expectations of population, reduction of prices for imported goods, reduction of purchase capacity of population 9reduction of money transfer from abroad and increase of unemployment), difficulty in loans, delay of money growth rate being in circulation.
First for the last ten years deflation hit 1.47 percent in Azerbaijan in April. Inflation hit 5.34 percent in the country in April 2008.
Research is being conducted upon the program "Calculations of alternative inflation" within the project of Hungary's institutional aid fund "Open society institute".
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