Azerbaijan, Baku /corr. Trend I.Khalilova / According to the information provided by the State Statistics Committee, in July, consumer goods prices increased by 0.1% compared to June. In addition, the prices for foodstuffs rose by 0.1% and non-foodstuffs by 0.3%.
According to the Head of the Public Finance Monitoring Center (PFMC), Inglab Ahmadov, for the first time in the past ten years, the seasonal factors have not affected the decrease in prices for agricultural products. More often than not the prices decrease in July, but this year, a price increase was observed for baked products, grain, macaroni, butter, poultry products, egg, mineral water, natural juice, spirits, ice cream, beer, citrus fruits and vegetables. A price decrease was registered for meat and fishing products, sugar, bananas, apples, pears, watermelons, melons, peaches, cucumbers, tomatoes, aubergine, beetroots and potatoes. As a result, in July the growth rate of inflation made up 8.9% as compared to the December of last year.
According to Ahmadov, the watermelon and melon season, which very significantly affects the decrease in inflation, did not play its role and it is difficult to expect it in future. Due to this, it is not available to expect a one-figure inflation although the Government forecasts it at a level of 9%.
The PFMC Head highlighted four key internal factors which affect the growth rate of inflation. Firstly Azerbaijan experiencing considerable inflow of external resources which have lead to the economy becoming more expensive, a symptom of the 'Dutch syndrome'. Secondly, a result of the 'Dutch disease' is the opportunity for an alternative area of labor, such as the service sector for agricultural producers and as a result, the number of agricultural producers has decreased. In its turn, this affects the delivery of agricultural products to the market.
The third reason leads to the increase of expenses which has resulted from a price increase for fuel, rent payment and tax. According to Ahmadov, inaccessibility of the agricultural producers to the market and market segments play a significant role in the increase of inflation. "The market has not been liberalized yet and it directly affects inflation," the PFMC Head believes.
In addition to internal factors, there are objective foreign factors. The increase in world oil prices has caused an increase in prices for imported products. The key reason for the price increase for baked products in the Country is the increase in prices for grain in Kazakhstan, Russia and Ukraine, which are key suppliers of this product.