Economist predicts hyperinflation in Azerbaijan: Interview

YEREVAN, JANUARY 15, ARMENPRESS. Azerbaijan’s Central Bank's glorified 15 billion reserves were reduced by 9 billion because of Azerbaijani authorities’ leaded policy. Economist Hakob Safaryan mentioned about the aforesaid in the interview with “Armenpress” referring to the economic developments in Azerbaijan during the latest period.

-Mr. Safaryan, Is the reduction of Azerbaijani manat caused by only the drop in oil prices in the international market? If we look at the oil exporting countries, we see that the level of the national currency did not record such decline as it was in Azerbaijan. Do you see drawbacks of Azerbaijani authorities in this case?

- First, one of the most important factors, of course, is the drop in oil prices. A decline of around 3 times was recorded. Another factor is the negative economic developments in Russia and Ukraine in the last two years which had a negative impact on other countries of the region including Armenia as well as Azerbaijan. Azerbaijani authorities just tried to persistently keep the rate of Azerbaijani manat stable during a year hoping that the situation will change and the oil prices will rise and the condition of Russian economy will improve. Therefore, there will be no need for a new devaluation of the manat. Therefore, since February 21 last year, when the devaluation of 34 percent happened for the first time, thereafter, the Azerbaijani authorities were waiting for 10-11 months up to December. There was another very important factor. Parliamentary elections expected to held in the autumn and in every way the government was trying to leave the inevitability of the currency devaluation after the elections. Imagine if this situation happened before the elections in that case it would not be of course favorable for the authorities. I can confidently say that Azerbaijani authorities were informed still in June-July months that the devaluation is inevitable because the rate was not possible to keep artificially.

-How does the created situation affect Azerbaijani economy?

- The negative impact on the economic situation in Azerbaijan continues. From adverse developments in the currency market, it can be concluded that developments have led to economic crisis. In particular, an inflation rate was recorded in the last 10-15 days in all fields. For example, gold jewelry prices rose by 40-50 percent. Alcoholic beverages and tobacco completely disappeared from shops, supermarkets and the important medicine from pharmacies, i.e all those products that were imported. Besides, currency exchange offices do not work for a week, and 6 million workers are unemployed. Many experts state that a hyperinflation is expected in Azerbaijan, as was the case in Ukraine. The currency depreciated and lead the inflation rate to rise to 43 percent. The same happened in Azerbaijan.