Central Bank of Azerbaijan expects inflation to fall to 4.4% in 2028

The Central Bank of Azerbaijan, CBA, forecasts medium-term inflation at 4.4% for 2028, CBA Chairman Taleh Kazimov said at a press conference today, Report informs.

"The Central Bank prepares its forecasts for the medium term, that is, a two-year period. I would especially like to emphasize that, according to the forecasts, inflation is expected to stand at 4.4% by the end of June 2028," Kazimov said.

According to him, 12-month inflation stood at 5.8% in June 2026. Annual price growth was 7.1% for food products, alcoholic beverages and tobacco products, 5.6% for paid services and 3.8% for non-food products. Annual core inflation stood at 5.5%.

"As in previous years, inflation this year has mainly been driven by external and cost-related supply factors. Among external supply factors, we can first mention the weighted average inflation of trade partners. As of the end of March, this indicator stood at 7.7%, adding 2.84 percentage points to inflation in the country.

"As for cost-related supply factors, I would mainly highlight the agricultural producer price index. According to the initial results for 2026, this index increased by 3.8%, adding 1.6 percentage points to inflation.

"Looking at demand factors, I would mention government and household consumption. According to the results for March, these indicators increased by 10.3% and 7.4%, respectively, year-on-year. Together, this added about 2 percentage points to inflation," Kazimov said.

Referring to other factors, the CBA chief noted that they had a reducing effect of 0.67 percentage points on inflation.

"According to the Central Bank's updated June forecasts, inflation is expected to be 6.1% at the end of 2026 and 5.8% at the end of 2027," Kazimov added.