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.
