Central Bank forecasts Uzbekistan's 2020 inflation rate

12 January 2020 11:42 (UTC+04:00)

By Trend

The inflation rate in Uzbekistan will be 12-13.5 percent in 2020, Trend reports referring to the report on preliminary indicators of monetary policy following the results of 2019 published by Uzbekistan’s Central Bank.

"The goals of achieving the forecast parameters of inflation determine the retention of the growth rate of credit investments in the economy within 20-25 percent, i.e. at the level of the projected increase in the nominal volume of GDP. The fiscal policy includes reducing the deficit of the general fiscal balance. In particular, the deficit of the general fiscal balance will decrease from 4 percent of GDP in 2019 to 2.7 percent in 2020, with its gradual decrease to 1.5 percent in 2022 and keeping it at that level in subsequent years, " said the bank.

According to analysts, in 2019, the inflation rate was forecasted at 13.5-15.5 percent. In fact, inflation at the end of 2019 amounted to 15.2 percent, which fit into the corridor declared by the bank.

The growth of inflation was facilitated by the liberalization of regulated prices and factors that stimulated investment and consumer demand, supported by increased credit activity of banks and increased government spending.

Thus, last year, rising prices for a number of goods significantly affected inflation growth.

"In 2019, regulated prices increased by an average of 21.6 percent, in particular, the growth in the price level of molded bread was 40 percent, gas - 18.8 percent, electricity - 18 percent and gasoline - 17.6 percent. Climatic conditions were reflected in the price level of fruits and vegetables. In particular, fruit prices increased by 21.4 percent, potatoes –11.7 percent and rice –5.8 percent," Central Bank said.

In addition, the devaluation of the Uzbek soum contributed to the growth of inflation.

So, over the past year, the rate of the national currency against the US dollar fell by 13.9 percent - from 8,341 to 9,501 soums per dollar. The volume of demand for foreign currency in the country increased by 37 percent and amounted to $15.5 billion; the supply increased by 44 percent and reached $11.7 billion. The volume of gold and foreign exchange reserves increased and amounted to $28.6 billion.

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