Inflation rate in Azerbaijan; Forecasting Accuracy Problem

Inflation rate in Azerbaijan; Forecasting Accuracy Problem

The Azerbaijani State Statistics Committee has surprisingly adjusted its forecasted inflation rate for 2012 6,0 % to 4,0 % as the committee reported. According to the State Committee, “The macro-economic indices reflecting socio-economic development of the country increased in the first quarter of 2012,” he said. “The amount of pensions and population income increased whilst inflation remained at a minimal level.”  It is reminded that the State Committee reported 3,1 % inflation rate in the first quarter of 2012 compared to the same period in 2011. The CESD survey verifies that inflation was 4, 7 in indicated periods. Price increasing observed mainly in food products particularly meats.  The center will conclude price collection survey by the end of February, 2012 in order to calculate annual inflation for the first quarter of 2012.

“It is not realistic to adjust inflation rate for 2012 since all other both independent and international sources forecast high inflation for Azerbaijan”- reported CESD experts.  “There is no any official proof why forecasted inflation rate reduced”- added CESD: “Unlike Government of Azerbaijan, IMF announced inflation as main problem for Azerbaijan in up-coming years. Meanwhile, no independent price collection has been done by State Statistic Committee due to targeting artificial low inflation rate. This makes very tricky to believe in précising of inflation rates announced by State Committee. Meanwhile, there is “black market price” in certain numbers of goods particularly in meat and beef products. Relevant ministries try keeping prices of certain goods in lower level in the market by using administrative methods, however, retail price is much higher than official announced. For instance, State Statistic Committee reported beef price in Azerbaijan as 9 manat (8,9 euro) however real price is 10 manat (9,7 euro) in the market. But State Committee reported 9 manat (8,9 euro) in its basket which does not reflect real price in the market. The same methodology is applied to certain number of other goods. In the results, official announced inflation rate is lower than real CPI.”- concluded by CESD.

It is reminded that EBRD forecasts 7,0 % inflation rate for Azerbaijan in 2012, since IMF forecast is 10,3%, ADB forecast 7,0 % and CESD forecasts 11,5 %.

© CESD, 2012


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