"Growth in consumer prices in Azerbaijan continued to accelerate in June, but there were signs of stabilization," said Gulnara Khaidarshina, Deputy Head of Research and Chief Economist for the CIS countries, at the Russian Gazprombank on July 28.

“Inflation in June reached 14.2% year on year, up 0.5 percentage points from May, mainly due to increased inflationary pressures in the food and services segments. Food inflation in Azerbaijan accelerated to 20.6% per year, adding 0.4 percentage points compared to May,” the economist said.

According to the State Statistics Committee of Azerbaijan, inflationary pressure continues in confectionery, bakery and pasta, meat, oil and fat, and dairy products. At the same time, food price growth slowed significantly in June compared to the 1.8 percentage point increase recorded in May, most likely due to the slowdown in inflation in Russia (-1.2 percentage points compared to May's figure to 15 .9% y/y), one of the key food suppliers to Azerbaijan.

“We also note signs of non-food inflation stabilizing, supported by a stable manat exchange rate, which is the anchor of macroeconomic stability in Azerbaijan and is maintained at AZN 1.7 per US dollar. In addition, non-monetary measures to combat inflation, including the abolition of import duties on several socially imported goods, are having an effect. Inflation in the non-food segment moderately accelerated in June (+0.3 percentage points against May to 7.4% y/y). The acceleration of inflation in the services sector to 10.9% y / y (+0.6 percentage points) is likely due to the start of the tourist season, the first after the removal of most quarantine restrictions. The most significant acceleration in tariff growth was observed in the rental housing, catering, and transport services segments," Khaidarshina listed.