BBC Monitoring Service, Turan News Agency,
25, January 2008

Excerpt from report by private Azerbaijani news agency Turan

Baku, 25 January: According to the official indicators of the State Committee for Statistics [SCS] of Azerbaijan, inflation for 2007 stood at 19.7 per cent. The committee itself does not mention this figure as they cite recommendations of the International Monetary Fund [IMF] which they claim wants to avoid confusion. Seemingly, the committee is happy with the IMF recommendations and at the press conference on the results of 2007 the chairman of the SCS, Arif Valiyev, said that compared with 2006 the rate of inflation in 2007 was 16.7 per cent.

Valiyev did not touch on the changes in the inflation rate throughout the year. In fact, starting from November 2007 the SCS stopped announcing year-on-year results for inflation (for example, comparing November 2007 to November 2006). The current calculations are based on comparing several months of this year to several months of the previous one: January-February to January-February, January-March to January-March and so on. This indicator serves as the basis for analysing the trends and causes of the changing prices on the consumer market throughout the year. It seems that this is what generates an inaccuracy which decreases the real inflation indicator from 19.7 to 16.7 per cent.

However, even the meticulously calculated rate of 19.7 looks debatable. Starting from the beginning of 2007 the non-government Centre for Economic Studies (CES) started alternative calculations of inflation. A few days ago the CES presented convincing evidence that inflation for 2007 stood at 28.96 per cent. The SCS criticized the conclusions of the CES, but refrained from direct open debates on the inflation results.

From the first days of 2007 inflation became a serious problem not only for the population, but also for the government which had committed itself to a single-digit inflation rate. Then the Tariff Council dramatically increased the tariffs for utilities and energy. The echoes of this decision are still there. At the end of the year the government was left with a 20-per-cent inflation - which independent researchers say it almost 30 per cent - and it will be very difficult to bring this inflation under control in 2008.