Total signs a gas supply agreement with the Chinese Jiangsu Guoxin for a period of 15 years

The Chief of Staff of the Ministry of Economy in Azerbaijan, Ilnur Gamalov, said on Wednesday that his country expects a decline in the oil and gas sector by 1.8 percent during the year 2027 - the same percentage expected for 2026 - while the economy as a whole is expected to achieve growth of 2.7 percent.

The government expects the pace of economic growth to accelerate, compared to the 1.7 percent expected for the current year, supported by the sectors of non-oil industries, information and communications technology, tourism, and transportation.

The non-oil and gas sector is expected to expand by an average of 4.4 percent in 2027.

The government's basic forecast for 2027 is based on the assumption of an oil price of $65 per barrel.

The inflation rate in the euro zone rose to its highest level in three years in October, driven by a rise in energy prices, amid expectations that it will continue to rise in the coming months, which may reinforce market bets on the European Central Bank raising interest rates again in December.

Data issued on Wednesday by the European Statistical Office (Eurostat) showed that inflation in the 21 member states of the euro zone rose to 4 percent in October, compared to 3.8 percent in September, in line with economists’ expectations in a Reuters poll.

In contrast, core inflation, which excludes more volatile food and energy prices, stabilized at 2.5 percent, also in line with expectations.

Inflation continues to rise at a rapid pace, exceeding the European Central Bank's target of 2 percent, in light of the rise in energy costs due to the US war on Iran, and the resulting increase in fuel prices, the effects of which were transmitted to retail prices in a region that relies heavily on energy imports.

Although the wave of price increases has not yet led to the emergence of secondary inflationary effects that are difficult to contain, the European Central Bank has raised interest rates twice since the beginning of the year, to prevent inflation expectations from rising in parallel with the price increase.

The bank kept interest rates unchanged last week, but a number of monetary policy makers, including the presidents of the German and Italian central banks, have already indicated the likelihood of raising them again in December.

Financial markets are currently pricing in between two and three increases in interest rates on deposits at the European Central Bank, currently standing at 2.5 percent, over the next year, amid a continuing change in expectations in parallel with oil price movements.

In terms of inflation components, the inflation rate in services, which represents the largest component in the consumer price basket, rose to 3.3 percent from 3.2 percent, while the prices of industrial goods rose to 1.2 percent from 1.1 percent. Food inflation also continued to accelerate, with unprocessed food prices rising by 4.6 percent year-on-year.

Analysts said Wednesday's data indicates that rising energy prices have not yet led to a second wave of inflationary pressures, but that provides only a limited amount of comfort to monetary policy makers.

They explained that the rise in energy prices, especially diesel and natural gas, is quickly reflected in the costs of other goods and services, creating indirect effects that are expected to last for a period. Low levels of natural gas inventories also increase the risk of rising heating costs.

Although these pressures may not appear clearly in the current data, they are likely to become clear in the coming months, especially in January, when the prices of a number of commodities are usually reviewed.

The European Central Bank currently expects inflation to remain above 4 percent during most of the first half of 2027, before quickly declining towards levels slightly above 2 percent, with the high readings recorded in the corresponding period of the previous year being excluded from annual inflation calculations.