Baku: Azerbaijan’s Central Bank is encountering difficulties in lowering interest rates this year, as per a forecast by ING Group, the largest financial group in the Netherlands, APA reports. The country, along with other CIS nations such as Uzbekistan, Kazakhstan, and Armenia, is witnessing limited opportunities to reduce interest rates due to growing inflationary pressures.

According to Azeri-Press News Agency, central banks in Azerbaijan, Uzbekistan, and recently Armenia, have followed Kazakhstan’s lead in expressing concerns about rising inflation risks from external sources. Despite market expectations for rate cuts, policy rates in all four countries have remained unchanged over the past month. This decision aligns with the upward trajectory of the Consumer Price Index (CPI), which suggests that the possibility of reducing key rates in the near future is minimal.

ING Group has adjusted its CPI expectations for the region, increasing them by 0.5-1.0 percentage points. However, the financial group has also revised its inflation forecast for Azerbaijan. The forecast for the second quarter of 2025 has been lowered from 6.1% to 5.9%, the third quarter from 4.6% to 4.4%, the fourth quarter from 4.7% to 4.6%, and the full year from 5.2% to 5.1%. Conversely, the forecast for the fourth quarter of 2026 has been slightly raised from 5.6% to 5.7%.