BAKU, Azerbaijan, Aug. 12
By Zeyni Jafarov - Trend:
The impact of monetary factors on inflation in Azerbaijan will be insignificant in the second half of 2021, Gulnara Haydarshina, Deputy Head of the Market Analysis Department of Gazprombank, told Trend.
“Monetary terms in Azerbaijan have not changed significantly since early 2021, and the budget still plays a key role in easing them. With a liquidity surplus created by fiscal stimulus, money market rates continue to decline. And by the end of the year, fiscal incentives will have an increasing impact on the monetary base, which grew by 4 percent in the first half of 2021,” Haydarshina said.
“There is also a gradual recovery in lending activity in Azerbaijan, and in the first half of the year, the banking sector's loan portfolio grew by 5 percent, including loans to the corporate sector - by 3 percent, mortgage loans - by 8.4 percent and consumer loans - by 7.6 percent,” she said.
According to the Gazprombank representative, external inflationary pressure from higher prices for imports and world food prices will be offset by a surplus in the current account, which will help maintain a stable exchange rate of the national currency.
“Taking into account the signals of the Central Bank of Azerbaijan (CBA) about the observed recovery of economic activity and the expected preservation of inflation within the target corridor under the current monetary conditions, we expect that the discount rate in the country will remain unchanged at least until the end of the year,” said Haydarshina.
---
Follow the author on Twitter: @jafarov_zeyni