CBA expects rising fuel prices to cause inflation

The direct and indirect reinforcing effect of the rise in regulated prices (up in fuel prices by the Tariff Council) on the inflation forecast in Azerbaijan is expected to be 1.5 percentage points, of which 1 percentage point can be realized in 2024. This was stated by the Central Bank of Azerbaijan (CBA).

Besides, the CBA statement says that further decisions on maintaining or raising the discount rate will depend on actual inflation and its forecast, as well as on the dynamics of external and internal risk factors.

As a whole, current monetary conditions are aimed at maintaining inflation within the target range and stabilizing inflation expectations.

According to the updated forecasts, while maintaining current conditions, the inflation under the baseline scenario will be 5.4% in 2024 and 5.5% in 2025. An upward change in the inflation forecast is mainly due to expectations of strengthening the nominal effective exchange rate of the manat at a lower rate, as well as changes in prices and tariffs for products and services whose prices are regulated by the state.