Despite sales growth, expectations are negative – Price increases are possible

In February of this year, the business activity index for the retail sector in Azerbaijan was published.
According to Yeniavaz.com, citing Central Bank data, the confidence index in the retail sector in February was minus 3.7.
This figure has decreased compared to the same period last year. In February 2025, the confidence index in the retail sector was plus 10.5.
It should be noted that the published information indicates that the business activity index for actual sales in the retail sector over the past three months was plus 23.8 (plus 22.3 in February 2025), and the change in inventory was minus 12.5 (plus 13.8 in February 2025). Moreover, sales expectations for the next three months were minus 47.4 (up from 23.1 in February 2025), while price expectations were plus 6.9 (down from 0.8 in February 2025).
For reference, although the published data shows actual sales have increased over the past three months, they also indicate a decline in entrepreneurs' sales expectations for the next three months. Declining inventory levels indicate that warehouses are holding fewer goods or that they are being cautious about deliveries. Furthermore, while price declines were expected last year, this year's price expectations are positive. This also points to rising inflation expectations in the market.
It should be noted that a few days ago, the Central Bank also announced a possible upward revision of its inflation forecast for 2026.

Elnur Ali