How rising food prices in Azerbaijan are affecting household budgets
Rising food prices in Azerbaijan
The official inflation rate reflects overall price changes across the country. However, the additional costs each family faces depend on the goods it buys, the share of its budget it allocates to basic needs, and whether its income has changed.
In Azerbaijan, families that spend a significant share of their budgets on food feel the impact of rising prices more acutely. When most of their income goes towards everyday necessities, higher food prices force them to cut other expenses. Families with greater financial resources can offset the increase by drawing on their savings.
According to data from the State Statistical Committee, published on 12 October, consumer prices in Azerbaijan rose by 5.5% in September 2026 compared with the same month a year earlier. Food, alcoholic beverages and tobacco products saw an annual increase of 6.9%.
To understand how rising prices affect household budgets, it is necessary to consider not only the inflation rate but also how households distribute their spending.
The same price rises, different additional costs
The consumer price index takes into account the share of individual goods and services in total consumer spending. However, households distribute their income differently. For example, a family that rents its home must allocate part of its budget to rent, while a family living in its own flat or house may have more money left for other needs. The spending patterns of someone who regularly buys medication also differ from those of someone who does not need to do so.
A 2024 article by the European Central Bank presents findings from a study of households in France and Germany. The authors identify two main reasons why families experience inflation differently: differences in consumption patterns and variations in price changes across regions.
We can illustrate this difference using the budgets of three hypothetical families. Suppose each family spent 1,000 manats (approx. $588) a month in September 2025, but allocated that amount differently across spending categories.
| Hypothetical family | Food, beverages and tobacco products | Non-food products | Paid services | Total |
|---|---|---|---|---|
| Family А | 600 | 150 | 250 | 1000 |
| Family B | 400 | 200 | 400 | 1000 |
| Family C | 250 | 350 | 400 | 1000 |
Note: all amounts are in manats.
The next step is to calculate how much the same goods and services cost a year later. To do this, we use official data from Azerbaijan’s State Statistical Committee on annual price increases in September 2026. According to the data, food, alcoholic beverages and tobacco products rose in price by 6.9%, non-food products by 3.6%, and paid services by 5.1%.
| Hypothetical family | Expenditure in September 2025 | Estimated expenditure in September 2026 | Additional monthly expenditure |
|---|---|---|---|
| Family A | 1000 | 1059,55 | 59,55 |
| Family B | 1000 | 1055,20 | 55,20 |
| Family C | 1000 | 1050,25 | 50,25 |
Note: all amounts are in manats.
For example, Family A’s spending on food, beverages and tobacco products increases by 41.40 manats (approx. $24.4), while spending on non-food products rises by 5.40 manats (approx. $3.2) and spending on services by 12.75 manats (approx. $7.5). This brings the total additional monthly cost to 59.55 manats (approx. $35.1).
To continue buying the same goods and services in the same quantities and at the same quality, the family will therefore need 1,059.55 manats a month instead of 1,000. However, actual consumption patterns and the prices families face may differ from those in this example.
This calculation shows that families that allocate a larger share of their budgets to food, beverages and tobacco products will need more money to cover the additional costs, because prices in this category are rising faster than those of other goods and services.
Why do low-income families have limited opportunities to save?
The difficulties caused by rising prices go beyond higher spending. Families must also find the money to cover these additional costs. Those who spend their entire income on basic necessities have little room to manoeuvre. They have to buy less, switch to cheaper products, put off meeting other needs or borrow money.
A 2023 analysis by the European Central Bank shows that when food and energy prices rise faster than the prices of goods and services overall, low-income households suffer a greater impact on their standard of living. One reason is that basic necessities account for a large share of their budgets. Another is that they have limited opportunities to draw on savings or replace familiar products with cheaper alternatives.
Even if a family continues to spend the same amount of money as before, that does not mean it can maintain its previous standard of living. For example, if the family buys fewer items, the same amount of money will buy fewer goods. In this situation, looking only at the total on the receipt can mask an actual decline in living standards. Comparisons must therefore take into account not only the cost of purchases but also the quantity and quality of the goods bought.
When do wage increases offset rising costs?
To assess a household’s purchasing power, we need to compare changes in its income with the rise in its expenses. An increase in the country’s average wage does not mean that every worker’s earnings have risen by the same proportion. Household budgets may also depend on pensions, benefits and other sources of income, not just wages.
If Family A in the example above saw its income rise from 1,000 to 1,050 manats, it would still need an additional 9.55 manats to maintain its previous level of consumption. Despite the increase in income, the rise would not fully offset higher prices for goods and services. By contrast, the same income increase would almost entirely cover Family B’s additional costs.
This calculation shows that nominal income growth does not always translate into a higher standard of living. The outcome depends on how much the prices of the goods and services a particular household buys have risen, and how far its income growth offsets the additional costs.
Slower inflation does not mean prices are returning to previous levels
Even when annual inflation slows, prices do not return to their previous levels. According to data from Azerbaijan’s State Statistical Committee, annual inflation stood at 5.7% in September 2025. Taking this figure together with the price increases recorded in September 2026, we find that the overall price level rose by approximately 11.5% over the two years.
The latest inflation figure therefore reflects further price increases on top of an already elevated level. Slower inflation may ease pressure on household budgets, but restoring previous purchasing power requires income growth to offset the cumulative rise in the cost of goods and services over the preceding years.
The key indicator of an improvement in a household’s financial position is its ability to afford food, housing and other essential goods and services at the same level as before. The amount left after covering basic expenses also helps show how well the household can cope financially with unexpected costs.
Rising food prices in Azerbaijan
