CBA expects inflation at 5.9% in 2026 and 2027

Annual inflation in Azerbaijan, according to the baseline scenario, is expected at 5.9% at the end of both 2026 and 2027.

As Report informs with reference to the Central Bank of Azerbaijan, the forecast is based on the assumption that state-regulated prices and tariffs will remain unchanged.

"The forecasts under the baseline scenario envisage that state-regulated prices and tariffs will remain at a stable level," the CBA said.

Earlier, the Central Bank forecast annual inflation at 6.1% in 2026 and 5.8% in 2027.

The CBA noted that annual inflation is within the target range of 4 ± 2% and is moving in line with the forecast trajectory of the baseline scenario.

In September 2026, annual inflation stood at 5.5%, which is 0.2 percentage points lower than the August figure. Prices for food products, alcoholic beverages, and tobacco products rose by 6.9% year-on-year, paid services by 5.1%, and non-food products by 3.6%. Annual core inflation amounted to 4.9%.

The main inflationary risks are linked to the international situation. Against the backdrop of global geopolitical uncertainty, there remains a significant risk of rising energy and food prices, as well as the transmission of this growth to domestic prices through Azerbaijan's main trading partners.

The extent of such an impact, along with other factors, will depend on the dynamics of the manat's nominal effective exchange rate.

"Going forward, the CBA's inflation forecasts will be updated primarily depending on the scale at which these risks materialize. Under the current fiscal and monetary policy, no significant increase in inflationary pressure from domestic demand is expected," the statement reads.