The latest data from the State Statistics Committee, showing that more than half of Azerbaijanis’ expenses go toward food, effectively confirms the deterioration of the country’s consumer situation. Despite the growth of nominal incomes, real purchasing power continues to decline, and the food market is increasingly displaying signs of systemic problems that are already directly affecting the population’s quality of life.

According to the report, out of 58.6 billion manats in retail sales recorded since the beginning of the year, more than 31.9 billion were spent on food, beverages, and tobacco products. In other words, a significant portion of household budgets is used merely to cover basic needs – a situation more typical of developed countries during crisis periods than of an economy that Azerbaijan seeks to present as dynamic and growing.

The rise in food expenditures is a direct result of the fact that food inflation has outpaced overall inflation for several consecutive years. While global prices fluctuate, the local market reacts too sharply: even minor instability is immediately reflected on store shelves. The problem is compounded by Azerbaijan’s partial dependence on imports of key items – grain, oils, and processed foods. This creates a paradox: despite significant investments in the agricultural sector, the country remains hostage to global market conditions.

The internal structure of the market looks no less alarming. Segments responsible for food logistics and distribution remain highly concentrated, which creates a weak competitive environment in which prices rise quickly but decrease slowly – or do not decrease at all. As a result, consumers constantly find themselves in a situation where they must tolerate higher costs without being able to compensate for them through income growth.

At the household level, the consequences are even more noticeable: families are left with fewer resources for healthcare, education, household goods, and other important categories. People are effectively forced to cut back on expenditures that have a direct impact on their quality of life. Moreover, the population’s ability to save is shrinking, which in the long term reduces the economy’s resilience to shocks and crises.

A cultural factor that has long been considered a strength – attention to high-quality products and food traditions – under current conditions has turned into an additional financial burden. People continue to buy familiar products even as their prices rise, simply because changing consumption habits is difficult. As a result, spending on everyday purchases remains critically high.

Economists have repeatedly warned: when half of a household’s budget is spent on food, this is a clear signal of a mismatch between incomes and the real cost of living. Under such conditions, it is difficult to speak of consumer market growth and, consequently, of meaningful support for economic dynamics. The current structure of spending shows that related industries are slowing down, and domestic demand remains weak and uneven.

The outlook for 2026 remains uncertain. Even under the most optimistic scenarios, a rapid decrease in the share of food expenditures is unlikely – too many factors are putting pressure on consumers. The baseline scenario, which experts see as the most realistic, essentially predicts the continuation of the current burden. Any external price shocks – rising costs of grain, fuel, or logistics – could further worsen the situation and increase pressure on household budgets.

Thus, the statistics published by the State Committee represent a troubling signal that the economy is applying the brakes precisely where it should be accelerating. Rising food expenditures are becoming a barrier that limits development, reduces living standards, and makes the population increasingly vulnerable. Without structural reforms in the food sector and real income growth, the situation risks deteriorating even further.

#AZRBAIJAN

11.12.2025 01:54