BAKU, Azerbaijan, Sept. 20
By Zeyni Jafarov - Trend:
The updated forecast of the Central Bank of Azerbaijan (CBA) on inflation played was instrumental in making a decision on the refinancing rate, which increased by 0.25 percentage points after a long pause – from 6.2 to 6.5 percent, Seymur Ibadov, the head of the Research and Investment Consulting Department of Unicapital JSC, told Trend.
The average annual inflation in Azerbaijan is projected at 5.4–5.8 percent, which is already close to the upper limit of the target corridor (4+/-2 percent), he said.
"Annual inflation in Azerbaijan is expected to reach 7-7.5 percent by the end of 2021, and next year – within 4-5 percent. All these factors weaken the neutralizing effect of monetary and fiscal policy by strengthening the role of inflationary factors in the balance of price stability risks," said the Unicapital representative.
After interest rates have remained stable for a long time, the phase of their increase begins.
"It is expected that by the end of 2021, the average annual inflation in Azerbaijan will grow by another 1 percent – from 4.8 percent in 8 months of 2021 to about 5.8 percent. In this regard, provided that inflation accelerates faster than expected, the Central Bank may once again increase the interest rate," Seymur Ibadov added.
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