Musk's Ambitious Plan to Curb Inflation in the U.S.: Can Azerbaijan Learn from It?

Elon Musk, co-chair of the U.S. Department of Government Efficiency (DOGE), has outlined a strategy to bring inflation in the United States down to zero by 2026 through aggressive cuts in federal spending. Musk’s plan, which aims to reduce approximately $4 billion in projected daily expenditures, is designed to shrink the federal deficit to $1 trillion by 2026. While the deficit would still be substantial, Musk argues that accelerated economic growth could offset inflationary pressures, ultimately stabilizing the economy.

Initially, Musk proposed cutting government spending by $2 trillion but later acknowledged that this would be an ideal scenario. A more pragmatic approach, he admitted, would involve a $1 trillion reduction, although he did not specify a timeline for implementing these cuts. Typically, fiscal experts assess government budget strategies over a decade rather than within a short two-year window.

The Department of Government Efficiency, established under President Donald Trump and co-chaired by Musk and entrepreneur Vivek Ramaswamy, is mandated to overhaul federal operations. The agency plans to deploy representatives to key government institutions to identify cost-saving opportunities and eliminate inefficiencies.

Many economists remain skeptical about the feasibility of such drastic cuts, given that a significant portion of U.S. government spending is allocated to politically sensitive mandatory programs such as Social Security and Medicare. Others warn that aggressive spending reductions could stifle economic growth rather than promote it.

Lessons for Azerbaijan: Can Zero Inflation Be Achieved?

While Musk’s approach remains a topic of debate in Washington, similar strategies could be considered by Azerbaijan as it seeks to manage inflation and stabilize its economy. The Central Bank of Azerbaijan (CBA) has set an inflation target range of 4% ± 2%, with the current policy rate at 7.25%. Experts suggest that a more aggressive monetary stance—potentially further interest rate hikes—could curb inflation by discouraging excessive borrowing and spending.

"The key to controlling inflation is a consistent and credible monetary policy," said a senior CBA official, speaking on condition of anonymity. "The government must balance fiscal discipline with targeted investments in productive sectors."

Fiscal Discipline and Economic Growth

Similar to Musk’s strategy for the U.S., Azerbaijan could benefit from a thorough review of government expenditures. A stricter fiscal policy—prioritizing essential spending while reducing inefficient subsidies—could help keep inflation in check. While the government has already adopted a more disciplined budgetary approach, further cuts in non-essential expenditures may be necessary.

Economic diversification remains a crucial factor in controlling inflation. Azerbaijan’s heavy reliance on hydrocarbon revenues makes it vulnerable to external shocks. Encouraging foreign direct investment (FDI) in non-oil sectors such as agriculture, technology, and green energy could drive growth while mitigating inflationary risks.

"A stable investment climate is essential," said Gubad Ibadoglu, an expert at the Economic Research Center. "Azerbaijan needs to attract more private capital to sustain long-term growth without excessive government spending."

Inflation Forecasts: Realistic Targets

Current projections suggest that achieving zero inflation remains an ambitious goal. The CBA forecasts an annual inflation rate of 5.5% in 2025, with a decline to 3.8% in 2026. The UN offers an even more optimistic outlook, predicting inflation to drop to 3.6% in 2025 and 3.1% in 2026. These figures indicate that while completely eliminating inflation may be unrealistic, significant reductions are achievable with the right mix of policy measures.

Whether in the U.S. or Azerbaijan, the pursuit of zero inflation requires a delicate balance between fiscal prudence and economic stimulation. While Musk’s vision for the U.S. relies on deep spending cuts, Azerbaijan’s path may lie in a combination of tighter monetary policy, budget discipline, and strategic investments. Ultimately, controlling inflation is not just about numbers—it’s about ensuring sustainable growth without economic stagnation.