Central Bank of Azerbaijan Hikes Inflation Forecast Amid Global and Domestic Pressures

The Central Bank of Azerbaijan (CBA) has changed its medium-term inflation forecast. They now think prices will go up more than they thought. According to Governor Taleh Kazimov the annual inflation forecast for 2026 is now 5.9%. For 2027 it is 4.5%. This is different from the February estimates of 5.7% and 4%.

Governor Kazimov said the main reason for this change is the economy. He said food prices are going up other countries where Azerbaijan trades are also having high inflation. The value of the manat is not going up much as before. This makes it hard for Azerbaijan to avoid prices for imported goods. A small decrease in people buying things has helped a bit. The CBA thinks supply problems will keep driving up costs.

The economy is not doing well. In March 2026 inflation was 5.6%. The economy shrunk by 0.3%. This was because the oil and gas sector went down by 1.2%. Other industries grew by 0.2%. With this recent downturn the Central Bank thinks the economy will grow by 1.1% in 2026 and 3.2% in 2027.

Some independent economists do not agree with the Central Bank. They think the Banks numbers do not show how bad things really are for people in Azerbaijan. They say prices for things like food and housing have already gone up a lot. They think the Bank is blaming countries too much and not enough on decisions made in Azerbaijan.

These experts point to price hikes in Azerbaijan. Fuel prices went up. Utility bills are higher. Taxes and customs duties are also higher. This made prices go up. The higher fuel costs made transportation more expensive. This makes the final price of goods higher. As people earn the same but prices go up experts warn that it will be hard to keep prices stable. This is especially true, for things that come from countries.