BAKU, Azerbaijan, February 4. The baseline scenario of the Central Bank of Azerbaijan (CBA) forecasts annual inflation to be within the target by the end of 2026 and in 2027, Trend reports via the CBA.
The February 2026 forecasts under the base scenario expect annual inflation to be 5.5% in 2026 and 4% in 2027. The projection for inflation in 2026 has been adjusted to a lower estimate.
The CBA recalled that the balance of inflation risks has seen only minor changes since the last meeting of the bank's Management Board.
"Continued geopolitical tensions on a global scale, strengthening trends in economic fragmentation, and instability in the global trade environment keep uncertainties related to commodity and financial markets at a high level. The main external risk is related to the transmission of import prices to domestic inflation.
The realization of this risk will depend on factors such as the dynamics of inflation in trading partners, the direction of global commodity prices, and the volatility of the nominal effective exchange rate. The main internal risk factor in 2026 could be the realization of internal cost factors exceeding expectations," the CBA noted.
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