In the last few years, the biggest problem of the global economy is the sharp increase in prices. It is clear from the indicators released by many countries, as well as the UN Food and Agriculture Organization, that record indicators are recorded, especially in relation to food inflation.
In Azerbaijan, price increases are among the most discussed topics in recent times.
So, how are price increases calculated and what are the current inflation indicators?
Fakt Yoxla tried to find an answer to this question.
Average annual inflation indicators officially announced in Azerbaijan in 2014-2022:
| Year | Inflation (%) |
| 2022 (first 8 months) |
13.2 |
| 2021 |
6.7 |
| 2020 |
2.8 |
| 2019 |
2.6 |
| 2018 |
2.3 |
| 2017 |
12.9 |
| 2016 |
12.4 |
| 2015 |
4.0 |
| 2014 |
1.4 |
As can be seen from the table, the highest price increases were recorded in Azerbaijan this year. Even, the officially announced inflation indicator for 2022 is higher than the official inflation indicators in 2016-2017, when devaluation and the problems caused by it were acutely felt in Azerbaijan.
According to the official methodology, the consumer price index (inflation) is a relative indicator that characterizes the general change in the value of the recorded set of products and services purchased by the average buyer with purchasing power.
This indicator reflects the change in the total amount of consumption expenditures of the population in conditions where the products and services consumed during a certain period remain unchanged. The main purpose of inflation is to determine the price dynamics of consumer products and services.
The State Statistical Committee (SSC) announces 3 types of inflation every month:
Monthly Inflation – These inflation indicators show how prices in the given month have changed compared to a month ago. For example, the latest inflation indicators of the SSC refer to August 2022. In August, monthly inflation was 0.9 percent. That is, the price index in August 2022 increased by 0.9 percent compared to July 2022;
Average annual inflation - This indicator is calculated by adding up the inflation indicators of the last 12 months and dividing by 12. According to the announcement of the SSC, the average annual inflation in Azerbaijan as of September 1, 2022, is equal to 13.2 percent;
Annual inflation – This indicator shows how the current indicators have changed compared to the same month last year. For example, price differences between prices in August 2022 and prices in August 2021. According to the figures released by the SSC, annual inflation in Azerbaijan is currently equal to 14.2 percent.
When announcing the official inflation rate in Azerbaijan, the average annual inflation indicator is mainly mentioned. However, in international practice, annual inflation is referred to in this regard. Another point that independent experts pay attention to in the inflation calculation is related to the number of goods and services used to measure price increases. So, in its methodological explanations regarding the calculation of price increases, the SSC states that the price data collected for 528 representative types of products and services are used in the calculation of the index, taking into account the country's characteristics. However, for example, the number of products of this type in Turkey is slightly more than 400. In this regard, independent experts believe that "the most optimal approach is that In order to obtain a reliable and objective inflation indicator, statistical authorities should include in the basket as few products and services that satisfy the most essential needs of households as possible. Governments that use inflation as a political indicator are interested in increasing the number of products and services, thus providing an opportunity for manipulation, which makes it possible to have an inflation indicator at a lower level in official statistics."
DSK determines inflation based on 528 products and services. This product and service, in turn, is divided into two parts: food and non-food. It is clear from the official figures that food inflation has become more acute in Azerbaijan recently.
According to the statement of the Statistical Committee, as of September 1, 2022, food prices in the country have increased by 21.6 percent compared to the same period last year. It should be emphasized that food expenses are the main expenditure direction of the population in Azerbaijan.
According to official information, in August 2022, 55 percent of the population's expenses, i.e. slightly more than half of all expenses, were related to food, tobacco, and beverage expenses. From this point of view, the 21 percent price increase in the direction that takes a significant part of the population's expenses, of course, leads to a decrease in people's social well-being.
According to SSC, non-food products in the country increased by 8.9 percent compared to the same period last year, and paid services by 9.5 percent.
