Asian Development Bank changes inflation forecast for Azerbaijan in 2019-2020
Baku, Azerbaijan, Sept. 25
By Eldar Janashvili - Trend:
The Asian Development Bank (ADB) has lowered its inflation forecasts for Azerbaijan in 2019-2020, Trend reports with reference to the bank’s Asian Development Outlook (ADO) 2019 Update report.
Forecasts for inflation growth in the Asian region grew by 0.2 points in 2019 and 2020. In the Central Asian region, projected inflation growth also rose by 0.2 points in 2019 (up to 8 percent) and in 2020 (up to 7.4 percent).
As for Azerbaijan, the projected inflation rate in the country in 2019 decreased by 0.3 points, to 3.7 percent. In 2020, the same indicator decreased by 1.2 points, from an expected growth of 5 percent in April to 3.8 percent in September. The bank connects the reduction of the forecasted inflation growth in Azerbaijan with the expected decline in world food prices in the near future.
In the first half of 2019, inflation in Azerbaijan slowed down by 0.5 percent, to 2.5 percent thanks to the stability of the exchange rate, according to the report. As the inflation slowed, the Central Bank of Azerbaijan gradually reduced its rate from 9.75 percent in February 2019 to 8.25 percent in July 2019. [On Sept. 13, the CBA again lowered the discount rate to 8 percent].
Also, in light of the higher forecast of oil prices and the growth of tourism with the introduction of the simplified visa system, a current account surplus is forecast in Azerbaijan, revised from 13.6 percent of GDP to 13.9 percent in 2019 and from 10.8 percent to 11.6 percent in 2020, respectively.