BAKU, Azerbaijan, October 29. The Central Bank of Azerbaijan (CBA) expects annual inflation to remain within its target range over the medium term.
According to the Central Bank, its October baseline projections put annual inflation at 5.9% at the end of both 2026 and 2027.
Compared with its July forecasts, the CBA lowered its inflation projection for 2026 by 0.2 percentage points and raised its forecast for 2027 by 0.1 percentage points. The baseline scenario assumes that state-regulated prices and tariffs will remain unchanged.
Inflation risks are primarily linked to the international environment, the Central Bank said.
“Against the backdrop of global geopolitical uncertainty, the risk of rising energy and food prices, as well as the pass-through of these increases to domestic prices through major trading partners, remains significant. The extent of this pass-through will depend, among other factors, on the dynamics of the manat’s nominal effective exchange rate. The CBA’s inflation forecasts will be updated in the coming period mainly depending on the scale at which these risks materialize. Under the current fiscal and monetary policy conditions, domestic demand is not expected to significantly increase inflationary pressures,” the statement said.
The Central Bank noted that annual inflation remains within its target range of 4%, plus or minus 2 percentage points, and is following the trajectory projected under the baseline scenario.
In September 2026, 12-month inflation stood at 5.5%, down 0.2 percentage points from August.
Annual price increases reached 6.9% for food, alcoholic beverages and tobacco products, 5.1% for paid services, and 3.6% for non-food products. Annual core inflation stood at 4.9%, according to the CBA.
