Currently, against the background of the war, the rise in oil prices creates favorable conditions for Azerbaijan economically and allows for an increase in state revenues. This increase is expected to have a positive effect on macroeconomic indicators. However, the direct impact of this increase on the daily life of an ordinary citizen is questionable. In such circumstances, how are the welfare and purchasing power of the population affected?
In an explanation to Medianews.az on the subject, economist-expert Khalid Kerimli said that the ongoing processes bring more harm than good for the population.
He noted that many goods of business structures have been stuck in Iran for more than a month and are at risk:
“Products coming from the East were mostly transported via Bandar Abbas port, and trade channels of countries such as China, Korea, Japan, and India were operated through Iran. In this regard, these routes are very important for the country. Our dependence on imports is high, and changing routes leads to increased costs. Entrepreneurs are forced to transport goods at higher prices, which ultimately affects the population.”
According to the expert, the increase in oil and gas prices raises not only transportation costs but also the cost price of imported products:
“In the coming years, an increase in budget expenditures may affect the population and the economy, but for that, it is necessary to wait for the next fiscal year. This increase is short-term in nature, and no one can guarantee that it will be sustainable. Because oil and gas prices will not always remain at a high level. Since it is a short-term conjuncture, the government does not intend to take on long-term commitments due to these increases. The situation is not the result of the economy's internal factors but the outcome of processes in the global market. After the war ends, prices may drop by half. For this reason, the revenues of the oil fund are affected by the short-term conjuncture, but the impact on the population’s pocket will be negative.”
Oghuz Ayvaz,
Medianews.az