According to the report, inflation in Azerbaijan is expected at 6 percent in 2018 and 5 percent in 2019.
Inflation has since fallen to 5.5 percent in January 2018, the report said.
Absent a major weakening of the Azerbaijani national currency, the manat, Moody’s expects that inflation will stabilize at around 5-6 percent as confidence in the stability of the exchange rate grows, bringing down inflation expectations.
In such a scenario, the Central Bank of Azerbaijan would likely ease monetary policy further, having already cut the refinancing (policy) rate to 13 percent from 15 percent in February, the report noted.
Moody’s also expects Azerbaijan’s GDP to grow 1.5 percent in 2018 and 2 percent in 2019.
