Inflation rate to hit 20% in Azerbaijan this year

Valeria Fichera, head of the IMF Middle East and Central Asia Department (MCD) mission, told a press conference in Baku that oil prices hike in the world affected inflation too.

Although the government of Azerbaijan expects inflation at 13% for 2008, the IMF’s opinion is different.

According to her, the real inflation is likely to be higher.

“The IMF forecasts inflation at around 20% in Azerbaijan for 2008. By our reckoning, inflation may fall to a single-digit level in 2 to 5 years,” she added.

The IMF experts recommended Azerbaijan to hold some part of oil revenues abroad in order to make anti-inflation measures more effective.

Within the scope of the visit, the IMF mission also discussed amendment of the state budget.

The IMF experts called the government to save the budget spending.

Valeria Fichera said the budget growth may be 27% to 30% in 2008.

The IMF also recommended Azerbaijan to improve tax administration.

The mission also held meetings at banks.

Valeria Fichera added that loan lending doubled in Azerbaijan within past two years and that is not positive.

“International Bank of Azerbaijan now dominates the banking sector. Its share is 40%,” she added.

/APA/