CBA signals possible upward revision of 2026 inflation forecast

The Central Bank of Azerbaijan (CBA) has indicated that the country"s inflation forecast for 2026 may be revised upward amid evolving economic trends.

According to Report, under the baseline scenario, expectations for annual inflation at the end of 2026 and 2027 remain unchanged and are projected to stay within the target range. However, recent developments suggest that the 2026 forecast could be adjusted higher.

Since the previous interest rate corridor meeting, factors that could heighten inflationary risks have intensified, the CBA noted. Rising regional tensions have increased volatility in global commodity prices and financial markets, with imported inflation posing a key external risk to the domestic economy.

Potential disruptions in oil and gas supply chains, higher energy prices, and rising logistics costs may also accelerate inflation among Azerbaijan"s trading partners. Domestically, supply-side factors continue to play a significant role.

Despite these risks, the regulator emphasized that annual inflation currently remains within the target range. In February 2026, 12-month inflation stood at 5.7%, with price increases of 6.8% for food, alcohol, and tobacco products, 5.7% for paid services, and 3.7% for non-food goods. Core inflation for the year reached 5.6%, driven largely by external cost pressures.