Head of IMF Mission Says Rise in Tariffs on Energy Carriers Will Not Lead to Inflation Growth
Azerbaijan, Baku / Trend , corr. I. Khalilova/ Vitaly Kramarenko, the Deputy IMF Director for Middle East and Central Asia, has said that the effect of the January rise in prices on energy carriers and tariffs on public utilities on the growth of index of consumer prices in Azerbaijan in 2007 is expected at the level of four percent points.
According to him, the increase in the tariffs in January, 2007 will not cause the increase in the inflation in the country.
"Additional measures needed to be taken to avoid the growth of the inflation were discussed with the Azerbaijani Government," he said.
Mr. Kramarenko said that the inflation growth rates might reduce lower than the level observed in January, 2007 (17% to January, 2006).
"IMF is ready to render its assistance to the Azerbaijani Government in reducing the inflation growths," he noted.
IMF recommended the Azerbaijani Government to slow down the growth of budget expenditures, tighten the money and credit policy, increase percent rates (the rate of refinancing of the National Bank of Azerbaijan) , and maintain a more flexible policy of the currency exchange rate.
"The Government has informed the Fund about the possibility on reinforcing the money and credit policy and taking many structural measures. However, the Government told IMF that it was impossible to slow down the growth of budget expenditures in 2007. The reduction of the growth rates of budget expenditures is likely to occur in 2008," concluded he.