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World Bank expects Azerbaijan’s inflation to slow in coming years

Business Materials 5 October 2023 14:38 (UTC +04:00)
Laman Zeynalova
Laman Zeynalova
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BAKU, Azerbaijan, October 5. Inflation in Azerbaijan is expected to drop from 13.8 percent in 2022 to 9 percent as of 2023, Trend reports via the World Bank.

The inflation is set to continue to slow to 5.8 percent and 5.2 percent in 2024 and 2025, respectively, reads the latest report released by the Bank.

The WB estimates that the inflation in the country stood at 2.8 percent in 2020, before rising to 6.7 percent in 2021.

“Inflation is projected to slow to 9 percent in 2023, as food prices continue to fall and external pressures ease while remaining above the CBA’s upper range. Economic growth slowed sharply to 0.5 percent in H1 2023, dragged down by contracting oil production and moderate non-energy sector activity. Growth is projected at 1.5 percent in 2023 as a whole. Inflation eased, although it remains in double digits as of June 2023, and is expected to continue to decline. The current account surplus is expected to reduce in 2023 due to a reduction in exports and money transfers," said the Bank.

Azerbaijan’s Finance Ministry noted that as a result of measures implemented by the Central Bank of Azerbaijan within its authority to reduce inflation, anti-inflationary measures of the government, as well as relative reductions of prices for goods, especially food products, lower inflation in the main trading partner countries, and other global trends, in Azerbaijan from January through July 2023 there was a slowdown in inflation at the level of 1.7 percentage points to the beginning of the year, which is 0.8 percentage points lower year-on-year.

"Despite the decline in inflation in the country, high volatility of the external environment (further aggravation of the geopolitical and geo-economic situation in the world, disruption of international logistics chains, expectations that inflation in many countries will remain above target levels, as well as climate change and other negative external shocks) may lead to additional price growth," the ministry added.

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