BAKU, Azerbaijan, November 11. ING Group, the Netherlands’ largest banking group, forecasts that Azerbaijan’s annual inflation will average 5.7% in 2026, ease slightly to 5.6% in 2027, and rise to 6% in 2028.
The projections are based on ING Group data dated November 10.
According to the forecasts, annual inflation in Azerbaijan is expected to reach 5.7% in Q3 and Q4 2026. It’s anticipated that this figure will decline to 5.5% in Q1 2027 and remain at that same level in Q2 2027.
ING Group estimates that annual inflation will decrease to 5.4% in Q3 2027. It’s also projected to remain at 5.4% in the fourth quarter.
Consequently, the organization expects the average annual inflation rate for 2027 to be 5.6%. For 2028, the figure is forecast to rise to 6%.
The Central Bank of Azerbaijan (CBA) expects annual inflation to remain within its target range over the medium term.
"Specifically, according to the October forecasts under the baseline scenario, annual inflation is expected to be 5.9% at the end of both 2026 and 2027. Compared to the July forecast, the inflation forecast has been revised downward by 0.2 percentage points for 2026 and upward by 0.1 percentage points for 2027. The baseline scenario assumes that state-regulated prices and tariffs will remain unchanged.
Inflation risks are primarily linked to the international environment. Against the backdrop of global geopolitical uncertainty, the risk of rising energy and food prices, as well as the pass-through of these increases to domestic prices through major trading partners, remains significant. The extent of this pass-through will depend, among other factors, on the dynamics of the manat’s nominal effective exchange rate. The CBA’s inflation forecasts will be updated in the coming period mainly depending on the scale at which these risks materialize. Under the current fiscal and monetary policy conditions, domestic demand is not expected to significantly increase inflationary pressures," the statement said.
The Central Bank noted that annual inflation remains within its target range of 4%, plus or minus 2 percentage points, and is following the trajectory projected under the baseline scenario.
"In September 2026, 12-month inflation stood at 5.5%, down 0.2 percentage points from August. Annual price increases reached 6.9% for food, alcoholic beverages and tobacco products, 5.1% for paid services, and 3.6% for non-food products. Annual core inflation stood at 4.9%," the CBA added.
