IMF: "Inflation rate in Azerbaijan may hit 20% in 2008"

"Inflation rate may hit 20% in Azerbaijan in 2008", says the statement.

According to the statement, though the government of Azerbaijan expects inflation to be 13%, the rise in world food prices and restriction of anti-competition methods on the internal market, inflation may reach 20%.

The international monetary fund considers that the most effective way to reduce and regulate inflation rate is  financial restriction.

"The country's budget for 2008 includes the rise in pensions and salaries and about 48% rise in the investment budget, intended to accelerate socioeconomic development of Azerbaijan. The reviewed budget, probably, will lead to highest pensions and transfers for the investment program", says the statement.

According to the fund, this may lead to initial deficit on the level of 7% of the non-oil GDP, which is higher than in 2007. In this connection, the International Monetary Fund recommends to Azerbaijan to moderate the state expenses, which would raise quality and effectiveness of investments.

"The government's intention to raise expenses for development of the non-oil, social sectors and infrastructure is quite understandable, yet in the framework of the current economic state most investment expenses are untimely", says the statement.

/Day.Az/