Afət Ziyadqızı
Pensions, the minimum wage and salaries of employees in sectors financed from Azerbaijan’s state budget are expected to increase next year. Government decisions or decrees apply only to payments determined under the state budget and to the nationwide minimum threshold.
Speaking to the “Operative Information Center-OMM”, economist Khalid Karimli said the government could not directly increase the wages of private-sector employees and was only authorized to set the nationwide minimum threshold:
“The government has no authority to directly order a private-sector company to raise salaries. For example, it cannot require a private media outlet to increase the salary of a specific employee. However, by setting the minimum wage and minimum pension in the country, it establishes that salaries below this amount cannot be paid. Therefore, the government makes decisions only on wages and pensions paid from the state budget. In the private sector, the process is regulated by the labor market and companies’ financial capabilities.”
The expert also discussed the expected increase in the minimum wage and its reasons:
“I believe the minimum wage will increase by at least around 10-15% at the end of the year. The minimum wage was last raised to 400 manats, and this threshold has been in effect since Jan. 1, 2025. The figure has remained unchanged for two years. During this period, inflation was approximately 5.7% last year and at a similar level this year. Overall, prices have risen by around 11-12%. I believe the government will increase the minimum wage by 10-15% to offset this inflationary pressure. As the minimum wage rises, the salaries of employees in other grades working under the State Unified Tariff Schedule will also increase within a corresponding range.”
Regarding pension indexation, Khalid Karimli noted that it was carried out in accordance with procedures established by law:
“Pensions are financed directly from the state budget, and their increases are regulated by a specific procedure. Under the rules, pensions in the following year are indexed in line with the growth rate of the average monthly nominal wage in the previous year. According to current six-month statistics, the average monthly wage of employees has increased by 7.2%. If this rate remains unchanged by the end of the year, all pensions will be indexed by 7.2% at the beginning of next year. The precise figure will become known after the end of December, when official statistics are announced during the first 10 days of February.”
