Baku: Azerbaijan’s Central Bank is considering an upward revision to its inflation forecast for the year 2026. Under the current baseline scenario, it was previously expected that annual inflation would remain within the target range by the end of 2026 and 2027. However, recent analysis suggests that this forecast may require adjustment.
According to Azeri-Press News Agency, the Central Bank of Azerbaijan noted that recent developments have activated several factors that could contribute to an increase in inflation risks. One of the primary concerns highlighted is the escalation of regional tensions, which has led to greater volatility in global commodity and financial markets. This instability poses a risk of import prices impacting domestic inflation levels.
The report further outlines that disruptions in global oil and gas supply chains, coupled with rising energy prices and logistics costs, could elevate inflation among Azerbaijan’s trading partners. The potential for imported price increases affecting domestic inflation will depend on inflation trends among trading partners and the dynamics of the nominal effective exchange rate. Domestically, supply-side and cost-related factors continue to be significant contributors to inflation risks.