BAKU, Azerbaijan - Bread prices in Azerbaijan could come under pressure after January 1, 2027, when the current value-added tax exemption for wheat imports and sales and for the production and sale of wheat flour and bread is due to expire, economist Asif Ibrahimov said.
Ibrahimov told Globalinfo.az that the possible end of the exemption should be assessed in advance for producers, retailers and consumers. The tax benefit applies for 10 years beginning January 1, 2017.
The scheduled expiration does not mean authorities have decided to raise bread prices. The government could extend the exemption or adopt other measures before the deadline.
Why Prices Could Rise
If the exemption is not retained, Ibrahimov said the additional tax burden could raise production costs. Producers and sellers may pass part of that cost to consumers.
Because bread is a basic household purchase, even a modest increase would have a direct effect on family budgets, particularly for people with low and middle incomes. Ibrahimov said policymakers should calculate the likely effects several months before the deadline.
He also warned that higher prices for staples could strengthen expectations of broader inflation. He presented possible pressure on other goods and services as a risk, not an inevitable outcome.
No Specific Price Forecast Yet
Ibrahimov did not provide a forecast in manats or gapiks. The price after January 1 will depend on whether the exemption is extended, grain costs, production and delivery expenses, and how much of any additional burden businesses absorb.
Vesti Baku previously reported on the approaching deadline. Economist Emin Garibli said at the time that authorities could extend the VAT exemption or use other tools to restrain prices.
The key unresolved issue is whether the exemption covering wheat, flour and bread will remain in place beyond January 1, 2027.