Two different interpretations of officially announced inflation...

The latest figures released by the State Statistics Committee of Azerbaijan reveal a nuanced picture of inflation dynamics in March 2024 compared to the same period in 2023. According to the Committee, inflation stood at 0.4 percent, with food, beverages, and tobacco products experiencing a decline of 1.1 percent, while non-food products and paid services to the population saw increases of 1.1 percent and 2.2 percent, respectively.

While these figures provide valuable insights into price movements, there is a divergence of opinions regarding their interpretation and accuracy. Tahir Mirkishili, Chairman of the committee on economic policy of the Milli Majlis, highlighted the distinction between annual and average annual inflation indicators. In an interview with Turan, he explained that the reported figure reflects annual inflation, comparing prices in March 2024 to those in March 2023. Mirkishili noted that inflation has been on a downward trajectory globally, including in Azerbaijan, attributing this trend to factors such as decreasing import inflation and anti-inflationary measures implemented domestically.

However, economist Rashad Hasanov raised concerns about the accuracy of official inflation indicators, suggesting that they might underestimate actual price increases in the market. Hasanov emphasized the significance of food prices in shaping inflation trends, particularly in import-dependent countries like Azerbaijan. He acknowledged the role of declining food prices on the world market in 2023 in curbing inflationary pressures but cautioned against solely relying on official figures to assess the true extent of inflation.

Hasanov also discussed the impact of fiscal policies on inflation dynamics, highlighting the absence of disclosure regarding the social package in 2024. He noted that while this may have limited the potential for inflation to increase for fiscal reasons, it also underscores the challenges in accurately gauging inflationary pressures. Hasanov's forecast suggested that annual inflation would be around 1.8 percent in March, compared to the reported figure of 1 percent. He attributed this discrepancy to various factors, including policy interventions and the purchasing power of the population.

In conclusion, Azerbaijan's inflation trends remain subject to interpretation, with stakeholders offering differing perspectives on the accuracy and implications of official figures. While the reported data provide a snapshot of price movements, it is essential to consider broader economic factors and policy interventions when assessing inflation dynamics. Moving forward, continued transparency in data reporting will be crucial in fostering a comprehensive understanding of inflation trends and informing effective policymaking in Azerbaijan.