Azerbaijan draws up anti-inflationary program

By Azernews

By Ayya Lmahamad

Central Bank Chairman Elman Rustamov has said that the Azerbaijani government will soon adopt an anti-inflationary program.

He noted that the bank jointly with leading financial institutions is finalizing an anti-inflationary program, and the government will discuss and adopt it in the near future.

Rustamov also stated that the bank forecasts that inflation will start falling in the second half of 2022. He added that the bank is working gradually to reduce inflation in the country.

“The leading central banks of the world should tighten monetary and financial policy and strengthen anti-inflationary measures. This will help to reduce inflation in these countries, as well as help to reduce the inflation import in Azerbaijan” he said.

Inflation in 2021

To recall, inflation in Azerbaijan by the end of 2021 was 6.7 percent, with food inflation of 8.1 percent and non-food inflation of 5.1 percent.

Annual inflation in Azerbaijan is expected to be between 6.6 and 7.5 percent in 2022. The Central Bank previously predicted that annual inflation would be close to the target range in 2023.

Last year, the topic of inflation was among the most discussed, as global food prices reached a 10-year high, according to the World Bank. This was primarily due to rising food prices as a result of the COVID-19 pandemic, as well as weather conditions in some countries.

The main topic of discussion these days is what is being done to alleviate the effects of inflation, which has arisen as a result of the global price crisis. It is obvious that steps should be taken to reduce reliance on imports and maintain adequate levels of food reserves in the country, which will ensure price stability in the domestic market in difficult times.

State Reserves Agency

On February 10, President Ilham Aliyev signed a decree on ensuring the activity of the State Reserves Agency. A draft law “On state reserves” will be elaborated within four months.

Under the decree, the list of consumer goods of strategic importance is to be approved within three months after the agreement with the head of state. The president should also be presented with proposals on the creation, storage of state and mobilization reserves, their management and regulation of other issues.

In addition, the State Grain Fund was also transferred to the new structure.

It is worth noting that the state food reserves are created in order to ensure the food security of the population and are an integral part of state material resources.

Thus, the agency will create reserves of different types of food products which will be purchased from local producers at current prices, stored and in case of emergency sold to the population at the purchasing price. That is, with the creation of sufficient reserves of wheat from the country’s own resources, in case of the repeated rise in price, inflation will not affect the domestic flour and bread market. The same applies to fruits and vegetables, canned foods, etc.

The practice shows that hoarding reserves are the best practice in the fight to ensure the food security of the country.

Maximum allowance prices for flour, bread

Additionally, it is worth recalling that in order to prevent market price manipulation, the State Service for Antimonopoly Control and Consumer Market Supervision established the maximum allowance local prices for flour and bread.

Thus, the wholesale price for a 50 kg bag of flour was set at AZN 35.9 ($21.1), the retail price for 500 gr traditional (round) bread was set at o.50 qapiks (0.30 cents), and the retail price for 650 gr traditional (round) bread was set at 0.65 qapiks (0.38 cents).