Dutch company ING forecasts 5.1% inflation in Azerbaijan for 2026

ING Group, the largest banking group in the Netherlands, has revised its inflation forecast for Azerbaijan, predicting an average annual inflation rate of 5.1% for 2026. This forecast represents a 0.2 percentage point increase compared to the bank's previous estimates.

According to a report from ING, the average inflation rate for the first quarter of 2025 was 5.6%, aligning with earlier expectations, Caliber.Az reports per local media.

However, the bank projects that inflation will follow a fluctuating trend in the coming quarters. In the second quarter, inflation is expected to drop slightly to 6%, while the third quarter will see a further decrease to 4.5%. The fourth quarter is projected to stabilize at 4.7%.

Looking further ahead, ING forecasts the average annual inflation rate for Azerbaijan in 2025 to remain at 5.2%, unchanged from previous predictions. In 2026, the inflation trend is expected to decline gradually, with the first quarter forecast at 4.5%, the second quarter at 4.9%, and the third quarter at 5.2%. The fourth quarter is anticipated to see a slight increase to 5.7%.

In comparison, other major economic institutions have provided their own inflation projections for Azerbaijan. The Ministry of Economy expects inflation in 2025 to be 5.1%, with a decline to 4.3% in 2026. The Central Bank of Azerbaijan has slightly higher expectations, forecasting inflation of 5.5% this year and 3.8% in 2026.

International organizations have also weighed in on the issue. The United Nations predicts inflation rates of 3.6% for 2025 and 3.1% for 2026, while the World Bank anticipates an average inflation rate of 2.3% for the period of 2025-2026.

The International Monetary Fund (IMF) expects a higher rate of inflation, forecasting 5.7% for 2025, with a slight drop to 4.5% in 2026. Meanwhile, global credit rating agencies S&P Global and Moody’s have the most optimistic predictions, projecting 4% inflation this year and 3% for the following year.

The inflation rate in Azerbaijan was notably low in 2024, at just 2.2%. However, economic forecasts for the early part of 2025 suggest a more volatile economic landscape, with inflation already at 5.6% in the first quarter.

By Khagan Isayev