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CBA: Next year’s inflation forecast may be revised downward

10 December 2025 11:37 (UTC +04:00)

The forecast that annual inflation will remain within the target range by the end of 2025 and in 2026 remains unchanged, APA-Economics reports, citing the Central Bank of Azerbaijan.

It was noted that an analysis of recent trends indicates a possibility that the inflation forecast for the coming year may be revised downward.

“An analysis of changes in the balance of inflation risks since the previous meeting shows that upward risks have somewhat eased. However, geopolitical tensions and instability in the global trade environment continue to keep uncertainties in commodity and financial markets at a high level. The main external risk is related to the pass-through of import prices to domestic inflation. This risk will depend on inflation processes in trading partner countries and the dynamics of the nominal effective exchange rate. Domestic risk factors are mainly driven by supply–cost elements. The initial parameters of the 2026 state budget and the slowdown in the annual growth rate of lending reduce the risk of excessive growth in aggregate demand,” the report states.

For reference, according to the Central Bank’s October forecasts, annual inflation is expected to reach 6% in 2025 and 5.7% in 2026.