Increase in wages and social benefits do not compensate rise on prices, economists say

Despite the President’s belief that the increase in social benefits will dampen the rise on prices, specialists warn of economic difficulties in 2022.

Picture representing rising prices for food and groceries. Photo: Sambulov+Yevgeniy / shutterstock

President Ilham Aliyev affirmed in an interview to local Azerbaijani TV channels on December 12 that the rise on prices in Azerbaijan is inevitable.

According to him, the price of grain and wheat in the world has risen sharply. However, he pointed out that this year’s budget will be the largest in the history of Azerbaijan and that the increase on pensions and wages this year can be seen as compensation for the rise in bread prices.

Even though from January 1 2022, the minimum monthly wage increased from 250 to 300 manat and social benefits from 9% to 50%, specialists do not see a equivalence with the rise in prices.

According to economist Nemat Aliyev, the result is that presidential decrees to increase salaries, pensions, benefits and other social payments will not only not significantly improve the deteriorating living standards of the population, but it will also not return to how it was previously.

The funds allocated for these purposes in next year’s state budget are not able to compensate for the billions of losses caused by the rising price storm in the country. For this reason, official and unofficial promises that living standards will improve next year are far from reality. Everyone must keep accurate records and prepare for the challenges of the coming year.

– Nemat Aliyev

In addition, independent experts say that Azerbaijan can meet 30 percent of its demand for food wheat through domestic production. Because of that, the increase in the price of bread and food wheat in Azerbaijan this year is also connected with the increase in taxes in Russia, the importing country.

In this sense, economist Rovshan Agayev adds:

This is the highest figure for at least the last five years and food inflation is likely to be higher in 2022. First of all, we are highly dependent on imports, and global inflation is likely to be a problem in 2022. Second, according to official statistics, in November 2021, the price index of food producers in Azerbaijan was higher than the consumer food price index.

– Rovshan Agayev

In order to know how the rise in prices and pensions affected the population, Meydan TV went to the streets of Baku to know if the salary of citizens covers their basic needs. It happens that not only economists see a problem with rising prices. Even with the new social benefits’ decrees, the Azerbaijani population is feeling this unequal balance in their pockets.

When asked about how will the rise in prices affect one’s life, people complained about not being able to afford bread anymore. They stated that the increase in salaries did not help. The mismatch between prices and income seems to be an issue every citizen is facing at the moment.

Last year, prices for natural gas, electricity, gasoline, as well as food products rose sharply in Azerbaijan. Experts believe that prices will continue to rise in 2022.

Ana səhifəEconomyIncrease in wages and social benefits do not compensate rise on prices, economists say