Page 23 - Caucasus Outlook 2023

In the meantime, the government provided assistance to vulnerable
groups through a package of budgetary measures that included
increases in the minimum wage, pension and social allowances,
subsidies to flour producers, and VAT exemptions for wheat, wheat
flour, and bread. Despite these efforts, tax collections have been
growing far faster than expenditures since the beginning of the year,
resulting in a sizable budget surplus.

The Asian Development Bank expects 7% inflation in 2023, while the
EBRD’s forecast is as high as 12.2%. The IMF holds a middle ground of
10.8% in its World Economic Outlook.

The increased possibility of a global recession may lead to increased
volatility in financial and commodities markets. Simultaneously, the
Central Bank of Azerbaijan emphasised that domestic macroeconomic
policy will be directed towards minimising these risks (including through
the introduction of a fiscal rule). This will also be aided by continuous
improvements to the monetary policy operational structure.

23 Caucasus Outlook 2023 www.intellinews.com