The Government of Azerbaijan did not agree with the statements by the representatives of the international financial organizations on the achievement of two-digit inflation ratio by the end of 2006, and in 2007, Trend reports.
The Government urges that the increase of budget expenses for the next year by 50% will promote rise in inflation, said Oktai Hagverdiyev, the head of the Economy, Credit and Price Policy Department of the Cabinet of Ministers. He also said that the government intends to take adequate measures to suppress inflation.
In addition, the economical subjects themselves establish prices for their output in market economy conditions.
The Government set free prices, but it holds control over 35 types of products, Hagverdiyev said. As to impact of rise in prices of energy resources, particularly, domestic prices of natural gas, on consumer prices the governmental official said the relevant proposals are currently under consideration at the Cabinet of Ministers.
Meanwhile, the EBRD is still insisting on its initial forecasts (13%) of inflation expected in Azerbaijan in 2006, asserting that macroeconomic stability in the country remains an unsolved problem. The current growth pace of GDP causes the rapid increase of budget expenses.