Azerbaijan.US
Rising living costs are pushing more residents of Azerbaijan into debt, with consumer loans increasingly used not for housing or business, but to cover basic daily needs, including food purchases and medical treatment.
According to local reports and expert assessments, a growing share of households now plans their finances around debt obligations rather than income. What was once considered a temporary financial tool has become a permanent feature of everyday life for many families.
Economist Akif Nasirli says the role of credit in the economy has fundamentally changed. “Loans are no longer serving development goals. They are being used to maintain basic living standards,” he noted, adding that household debt continues to grow faster than incomes.
Nasirli points out that although regulators have previously signaled a softer credit policy, ordinary citizens have felt little relief. High interest rates remain a major burden, deepening credit dependence and contributing to the rise of non-performing loans.
He also criticizes how inflation is measured and perceived. While some durable goods, such as household appliances, have become cheaper, these items are purchased infrequently and do little to ease financial pressure. In contrast, food prices and other essentials, which households buy daily, have risen sharply and are the main drivers of real inflation felt by the population.
Official figures show that in 2025 the volume of non-performing loans increased by 13.5%, reaching 544.8 million manats. Analysts warn that without broader structural measures, the situation could deteriorate further.
Experts argue that reducing credit dependence requires changes not only in lending policies but also in income policy. Aligning wages and social payments with actual inflation levels, as well as strengthening oversight of price growth for essential goods, is seen as critical to easing pressure on household budgets.
