Economist: While prices have risen, income values have fallen in Azerbaijan
Calculations made by the Baku Research Institute based on figures released periodically by Azerbaijan's State Statistics Committee have shown that while prices have risen the past five years, devaluation has lowered the country's citizens' buying power.
The institute's study, "How has our family budget changed since the devaluation?", conducted a comparative analysis of consumer spending in 2014 and 2020 to see what effects devaluations had had on the populace.
On 21 February and 21 December of 2015, two separate devaluations took place in Azerbaijan. As a result, the Azerbaijani Manat (AZN) to US Dollar exchange rate more than doubled. Until the first the February 2015 devaluation, one USD equaled 0.78 AZN, but depreciation led it to now be 1.70 AZN.
According to the Institute, increases in expenditures were recorded in the shares of budgets spent on food, health, and utility and fuel. At the same time, hotel, cafe, and restaurant-related, recreational and cultural, as well as education expenditures have fallen.
From 2014 to 2020, monthly per capita consumption expenditures increased by 26.7 percent.
Economist Samir Aliyev says that the devaluation in the country in 2015 led to higher prices and lower incomes: "This has led to significant changes in the expenditure structure of family budgets. "If in 2001 the share of food in total consumer spending was 68.2 percent, the increase in revenues against the background of oil money reduced the share of food expenditures to 40 percent. However, after the devaluation, this figure began to rise again".
According to the economist, the share of utility and fuel costs has reached its highest level in 20 years: “The increase was also observed in transport and health expenditures. Instead, the share of recreation and cultural services, hotels, cafes and restaurants has begun to decline.
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