BAKU, Azerbaijan, January 7. Azerbaijan will continue easing its monetary policy in 2024, Trend reports, referring to the report of the United Nations World Economic Situation and Prospects 2024.
The UN report says that as inflation expectations take root, any monetary policy easing in 2024 is likely to be very gradual, especially if fiscal policy remains accommodative.
"Azerbaijan, as well as other countries in the region (after a series of previous rate hikes) have moved into an easing cycle. The prospect of disinflation is likely to support further interest rate cuts in 2024," the report says.
In addition, the UN forecasts that average annual inflation in Azerbaijan will amount to 5.9 percent in 2024, and inflation will slow down to 3.9 percent in 2025.
The Central Bank of Azerbaijan (CBA) decided to lower the discount rate from 8.5 percent to 8 percent at its last meeting in 2023, the upper limit of the interest rate corridor was reduced from 9.5 percent to 9 percent and the lower limit from 7 percent to 6.5 percent.
According to analysts of the ING Nederland, the easing of Azerbaijan's monetary policy will continue in the following years. Analysts forecast that the discount rate in Azerbaijan will be kept at 8 percent throughout 2024, and is expected to fall to 7.75 percent in the first quarter of 2025, with a subsequent reduction to 7 percent by the end of the year.
