Azerbaijan's inflation rate likely to be 20-25% by late 2008

Chairman of the Union of Free Consumers Eyub Guseynov told reporters that beginning from the New Year prices of some foodstuffs have risen by 10-15% while by the end of the year Azerbaijan's inflation rate may his 20-25%.

The famous human rights activist considers that the rise in prices is mainly caused by the lack of state consumer policy, monopoly, influence of officials on the market.

A source from a large Baku supermarket told Echo that in January-early February of 2008 prices went up on natural juice,as well as some alcohol drinks. In particular, the cost of 1 liter of Ukrainian-made juice has risen from AZN 1 up to AZN 1.6-1.8.

It is interesting that a new local producer of natural juices Jala appeared on the local market. The cost of a liter of a new production is AZN 1.

At the same time, local beer, for example, Xirdalan, 33 export and Bizim pive, has risen in prices by 30-40 qepicks. Earlier a bottle of beer was AZN 0.5-0.6 while now it costs AZN 0.9-1.

Moreover, prices are also rising on agricultural production, in particular, on fruits and vegetables. The supermarket says that prices rose on apples, pears, oranges, bananas, and tomatoes, cucumbers, salad and onion among vegetables.

The source from the supermarket noted touching upon other foodstuffs that beginning from January prices rose by AZN 0.1-0,2 on almost all foodstuffs, including butter, sunflower oil,  cereals, meat and dairy products, especially those of Russian production, bakery and other products.

It should be noted that  in 2007 annual inflation rate in Azerbaijan  neared 30%. On the whole, the market of services, where inflation rate reached 37.56% became more expensive. The market of services went up by 39% in Baku and by 35.73% in the regions. Such a high tariff rate is connected with the continuous influence of the January decision of the Tariff Council.

At the same time the market of foodstuffs rose in prices by 24.31% (22.66% in Baku and 23.88% in the regions). On this background, the inflation rate on the market of nonfoods reached 19.09%  (20.45% in Baku and 17.34% in the regions). Butter became a leader by rise in price last year. Prices on butter went high by 11.27% (12% in Baku and 10.35% in the regions) in a month on average. It is followed by fruits and vegetables (7.91% rise with 8.56% in Baku and 7.08% in the regions), milk and dairy products and eggs by 4.37% (3.22% in Baku and 5.83% in the regions), building materials by 4.53% (4.56% in Baku and 4.48% in the regions), clothes and footwear by 4.24% (5.43% in Baku and 2.73% in the regions). Prices went up on the market of sugar, bakery and meat.

At the same time by the forecasts of the experts this year prices will rise even more intensively.

"Stabilization of inflation is not expected, it might occur only after Azerbaijan's accession to the World Trade Organization. The prices will stop rising though remaining on the maximal level", Eyub Guseynov said.

He consider that "most officials have their business and prices in the country may rise if they wish".

According to the forecast of the Center of Economic Researches Gubad Ibadogly, if the current price tendency continues (when real inflation exceeds the official one by nearly two times) this year inflation rate will be minimum 24%. "Thus the 28% rise in salaries forecasted by the government, will be reduced to minimum under influence of inflation".