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Personal income exceeds inflation rate in Azerbaijan

01 December 2008 12:21 (UTC +04:00)

Personal income nationwide rose 35.7 percent, year-over-year, to $16.5 billion, above the 21.6 percent year-over-year increase in consumer prices, as measured by the price index for personal spending.
We see in the diagram below (black line stands for annual inflation and blue line for growth in personal income) that inflation is far exceeded by income rise.

The role of inflation on personal spending growth is an important macroeconomic factor. Given that there is no exact statistics of personal spending in Azerbaijan unlike peer countries, we take into account the amount of retail turnover of goods and services consumed by the population in the given period.
So, there was a 15.6 percent year-on-year growth in retail turnover of goods and 29.7% rise in services during January-October.
Given 21.6 percent annual inflation rate, retail turnover of goods fell 6% in fact.
The fact that personal income grew faster than inflation rate and that the real volume of retail turnover declined indicates that people kept money for savings.