What is not enough to reduce inflation in Azerbaijan...

President Ilham Aliyev has expressed his hope that inflation in Azerbaijan will decrease to single-digit levels by the end of the year. During a meeting focused on the socio-economic results of the first half of the year, the president acknowledged the current inflation rate as "thought-provoking" and attributed it to both objective and subjective factors.

In the period of January to June 2023, Azerbaijan experienced a 12.7 percent increase in inflation compared to the same period the previous year. The prices of food products, beverages, and tobacco products rose by 15.1 percent, while non-food products saw an increase of 11.4 percent.

Initially, the preliminary forecasts from the Accounts Chamber projected an average annual inflation rate of 6.9 percent for 2023. However, this figure was later adjusted and revised to 10.4 percent. The central bank's forecasts estimated inflation to be at 8.3 percent by the end of the year.

Mazahir Efendiyev, a member of the Committee on Economic policy, Industry and Entrepreneurship of the Milli Majlis, told Turan that Azerbaijan depends on imported essential goods, and since prices abroad have increased, it is natural for the country to experience inflation. He noted that measures have been taken to prevent inflation, such as enhancing transparency in the economy and achieving fiscal policy successes. Efendiyev highlighted the increased volume of taxes contributing to the state budget, as well as customs taxes, as measures that help curb inflation.

Efendiyev emphasized the need to continue developing the non-oil sector, accelerate job creation, and reduce transfers from the State Oil Fund to the budget. He believes that these steps will contribute to preventing inflation and stated that the government will take further actions in the autumn months to address the issue.

Economist Gubad Ibadoglu commented on Radio Azadlig that it is relatively easy to curb inflation in Azerbaijan and reduce it to a single-digit level, but this requires political will.

Ibadoglu claimed that the ruling family, through its subsidiary institutions, controls prices and the market economy.

He suggested that accelerating the transition to a market economy and establishing market institutions are crucial to reducing inflation.

Ibadoglu argued that until the country implements a functioning system where authorities are accountable to the people, inflation in Azerbaijan will remain in the double-digit range.

The economist further alleged that the government will manipulate figures and declare single-digit inflation by the end of the year, while the actual inflation rate in the country will remain in double digits.

Official data indicates that GDP grew by only 0.7 percent in the first five months of 2023. In the same period last year, the growth rate was 7.2 percent. The current year's economic growth is lower than both last year's figures and the government's initial forecast of 2.7 percent.