Azerbaijan Economy Ministry lowers forecast for 2023 average annual inflation to 9.5%

BAKU. Sept 21 (Interfax) - The Ministry of Economy of Azerbaijan has revised down its inflation forecast for 2023 and now expects an average annual level of 9.5% versus a prior forecast of 10.4%.

Based on forecasts from the Finance Ministry, average annual inflation in Azerbaijan is expected to slow to 5.3% in 2024.

Average annual inflation for 2025 is forecast at 4.9%, 4.4% for 2026, and 4.2% for 2027. Average annual inflation in Azerbaijan in 2022 was 13.9%.

Meanwhile, the country's public debt will grow to 31.4 billion manat by 2028, or 23.2% of GDP, Finance Ministry forecasts say.

By the end of 2027, Azerbaijan's external debt will total $5.4 billion (9.2 billion manat), or 6.8% of GDP, while internal debt will be 22.2 billion manat, or 16.4% of GDP, Finance Ministry forecasts shown to Interfax say.

Public debt [internal plus external] at the end of 2023 is expected to reach 26.804 billion manat, or 22.4% of GDP, Ministry forecasts say. External debt is forecast to reach 10.848 billion manat ($6.381 billion), or 9.1% of GDP, while internal debt is projected at 15.955 billion manat, or 13.3% of GDP.

Thus, in 2027, the nominal size of Azerbaijan's public debt will be 17.2% higher than the forecast for 2023. Domestic public debt in 2027 versus 2023 will increase 36.9%, while external debt will decrease 15.6%

The Ministry of Finance said that, in 2023, 1.183 billion manat will be allocated from the state budget to service the state debt.

As previously reported, as of July 1, 2023, Azerbaijan's national debt is estimated at 16.151 billion manat, or 14.5% of GDP. This includes internal debt of 4.970 billion manat, and external debt of 11.181 billion manat ($6.577 billion).

The official exchange rate as of September 21 is 1.7 manat/$1.