Azerbaijan Expects Limited Fiscal Policy Impact On Inflation - CBA

(MENAFN- Trend News Agency) BAKU, Azerbaijan, November 4. Fiscal policy isn't expected to have a significant impact on inflation in Azerbaijan, the Governor of the Central Bank of Azerbaijan (CBA) Taleh Kazimov said today during a meeting of the parliamentary Committee on Economic Policy, Industry and Entrepreneurship, where the draft law "On the State Budget of Azerbaijan for 2027" was discussed.

“We view the macro-fiscal framework presented for 2027 and the medium term positively,” the CBA chief remarked.

He noted that the conservative growth and optimization of state expenditures, the gradual reduction of oil transfers, an increase in the share of non-oil sources within budget revenues, as well as the maintenance of the budget deficit and public debt at manageable levels, serve to strengthen fiscal sustainability.

"We believe that enhancing the efficiency of budget expenditures will contribute to an improvement in the fiscal multiplier.

Despite the temporary rise in global oil prices, we view the adoption of a conservative oil price assumption for 2027 as a positive step. Reducing dependence on oil revenues is of great importance, given the decline in production and the long-term uncertainties in energy markets.

It's expected that the budget deficit in 2027 will also be financed primarily through domestic and external borrowing. In light of this, fiscal policy isn't anticipated to have a significant impact on inflation," he added.

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