Baku: A 10% increase in global food prices could raise inflation in Azerbaijan by approximately 1.5 percentage points, APA-Economics reports, citing ING Group, the largest financial group in the Netherlands. The analysis highlights Azerbaijan's vulnerability to imported inflation due to its significant reliance on imports from developed markets and regions affected by Middle Eastern tensions.

According to Azeri-Press News Agency, ING analysts have identified both external and domestic factors contributing to inflationary pressures in Azerbaijan. Rising global food prices, along with domestic utility tariff hikes, are cited as primary drivers of this inflation. Despite a period of low inflation in 2024, price growth escalated to the 5-6% range in 2025, with further acceleration in early 2026 due to changes in domestic tariffs.

ING Group's report underscores the limited scope for monetary policy adjustments, as persistent inflation risks restrict the potential for interest rate cuts. The bank highlights that the significant share of imports from regions impacted by geopolitical tensions in the Middle East poses a considerable risk to maintaining price stability in Azerbaijan.