BAKU, Azerbaijan, Sept. 16
By Zeyni Jafarov - Trend:
In order to contain inflationary pressure in the economy, it is expected that the Central Bank of Azerbaijan (CBA) will raise the refinancing rate by 0.5 percent from the current 6.2 to 6.7 percent following its meeting on September 17, Gulnara Khaidarshina, Deputy Head of the Market Analysis Department at Gazprombank, told Trend.
"We believe that a possible increase in the discount rate by the Central Bank of Azerbaijan will be of a one-time nature," Haidarshina said.
The growth of consumer prices in Azerbaijan accelerated to 6.7 percent in August 2021, adding two percentage points compared to June 2021, when the upward inflationary trend was still smooth, she noted.
"Inflation in Azerbaijan has gone beyond the target corridor of the Central Bank, which was noted in August, primarily in the food segment. The acceleration of inflation observed in August was due to an increase in the growth rate of food prices by 1.4 percent compared to the previous month - from 6.4 to 7.8 percent. Buckwheat, meat and meat products, confectionery products increased in price the most, which is understandable in the conditions of high world food prices," Khaidarshina said.
Inflation in the non-food segment also accelerated in August, but less significantly – by 0.2 percent (from 4.8 to five percent).
Construction materials, separate categories of household appliances and electronics, auto parts increased, which is explained by the implementation of the demand postponed during the quarantine restrictions. This was also facilitated by the increase in the cost of logistics of non-food products on the world market in the context of the pandemic.
"We believe that the Central Bank of Azerbaijan will limit itself to a one-time rate increase and will take a pause in changing it at least until the end of the year. This approach will allow us to withdraw the real rate from the negative zone, which can minimize the possible pressure on the economy," Khaidarshina said.