By Mirsaid Ibrahimzade
In January-February 2019, inflation in Azerbaijan amounted to 0.8 percent compared to the indicators at the end of last year, Trend reports with reference to the Central Bank (CB) of the country on March 15.
As noted, food products’ prices rose by 2.1 percent, non-food - by 0.2 percent. Prices for services decreased by 0.6 percent.
“The increase in prices for food products is primarily due to seasonal factors. Prices for 15 percent of the products in the food basket remained unchanged, and for 16 percent of the products they were cheaper. In 85 percent of the more expensive products, growth was less than two percent,” the statement by CBA says.
In January-February 2019, average annual inflation was 1.9 percent, which is 2.8 percent less than the same period last year.
Since the last meeting of the CBA Board, there have been no significant changes in inflation expectations for businesses in the country. CBA surveys showed that over the past two months, inflation expectations in the sphere of trade, non-oil refining and construction have decreased, while in the services sector, on the contrary, increased. Among households, the share of those expecting acceleration of the inflation pace remained unchanged.
For this year, the CBA expects inflation at 4 percent (±2 percent).
Azerbaijan’s strategic currency reserves have grown by 4.1 percent since the beginning of 2019, amounting to $46.6 billion, Trend reports referring to the Central Bank of Azerbaijan (CBA).
As noted, this suggests that the balance of payments is formed with a surplus.
"The external environment remains favorable. According to preliminary data, the positive balance of foreign trade amounted to $986.3 million. Exports increased by 42.6 percent over the year, including non-oil exports, which increased by 16.4 percent," the statement read.
According to the CBA, in recent months, an uptrend in commodity prices has been observable in world markets. The average oil price was $62 in January-February 2019. The price of the "black gold" increased by 26 percent ($14) since the beginning of the year. According to the Food and Agriculture Organization of the United Nations (FAO), the food price index rose 3.4 percent in January-February, but nonetheless remained 2.2 percent less than the same period last year.
In addition, Azerbaijan Central Bank decreased discount rate from 9.25 to 9 percent.
The upper limit of the interest corridor is lowered from 11.25 to 11 percent, the lower limit from 7.25 to 7 percent.
The decision comes into force on March 15.
Note that the last time the discount rate was lowered on the first of February of this year - from 9.75 to 9.25 percent.
During 2018, the CBA reduced the discount rate four times: in February - from 15 to 13 percent, in April - from 13 to 11 percent, in June - from 11 to ten percent, in October - ten to 9.75 percent. In August and December, the discount rate was kept unchanged.
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