Inflation decreased by 0.9 percent in June 2023 compared to the previous month, Trend reports.
According to the Central Bank of Azerbaijan (CBA), in the reporting month inflation amounted to 10.6 percent, down five percentage points from the peak level of recent years, recorded in September last year, and annual food inflation fell to 11.5 percent.
The CBA noted that annual inflation has declined due to both external and internal factors.
"Reduced prices on the global commodity markets and the return of international freight costs to pre-pandemic levels have had a reducing impact on inflation in Azerbaijan. According to estimates, the average inflation among trading partner countries in June of this year has decreased by more than twice compared to the peak level observed in October of last year," the bank said. "This took place mainly due to weakened global economic activity, a decrease in global energy prices, and stringent monetary policies in most countries."
According to the latest report from the World Bank on commodity markets, prices of raw materials fell by 37.1 percent year on year in June, including energy prices by 45.1 percent and non-energy prices by 15.1 percent. Meanwhile, according to the UN Food and Agriculture Organization, food prices decreased by 20.9 percent year on year, the CBA reminded.
"At the same time, decisions made through monetary conditions, supporting the balance in the currency market and strengthening the nominal effective exchange rate of the manat, helped reduce inflationary pressures," the CBA pointed out. "Favorable external conditions and an increase in the country's non-commodity export potential played a special role in maintaining the balance in the currency market. In the first quarter of 2023, the positive balance of the current account amounted to $3.4 billion, or 18.9 percent of GDP. Positive processes in the external economic sector continued in the second quarter."
As the bank noted, despite the slowdown in inflation, high external volatility and the risk of excessive expansion of aggregate demand can be considered inflation growth triggers.
