BAKU, Azerbaijan, July 23. Significant changes haven't taken place in the balance of inflation risks since the last meeting [of the Central Bank of Azerbaijan or CBA], Trend reports via the CBA.
The processes taking place in global trade are causing fluctuations in commodity and financial markets. In these circumstances, import inflation is considered an external risk factor for inflation:
"This factor depends on inflation in trading partners, on the one hand, and on the dynamics of the nominal effective exchange rate, on the other. The main internal risk factor that can increase inflation is the activation of cost factors and excessive growth in aggregate demand. In this regard, the possible effects of government spending and consumer loans on aggregate demand and prices in the medium term should be constantly monitored," the CBA said.
According to the baseline scenario, annual inflation is projected to be within the target in 2025 and 2026.
"Thus, according to the July forecasts under the baseline scenario, annual inflation is expected to be 5.7 percent in 2025 and 5.3 percent in 2026. The continued alignment of this year’s inflation forecast with the target, along with sustained stability in the foreign exchange market, creates the conditions for monetary policy easing," the bank added.
Stay up-to-date with more news on Trend News Agency's WhatsApp channel