Azernews.Az

By Abdul Kerimkhanov

Inflationary pressure on the economy of Uzbekistan in 2019 may increase, the consumer price index may be 17-18 percentage due to rising energy prices, wages in the social sector and taxes, the International Monetary Fund (IMF) said on its website on November 20.

The IMF mission on October 30 - November 8 was in Tashkent on a visit. IMF predicts that by the end of 2019, inflation on the CPI may rise to 17-18 percent, according to the review of the mission. Additional inflationary pressure will be associated with higher energy prices, higher wages for education and health workers during 2018, as well as higher indirect taxes introduced from 2019, according to the fund.

GDP deflator for January-September 2018 reached 31.5 percent, which primarily reflects the increase in prices for export goods as a result of the devaluation of the exchange rate in September 2017, according to the IMF

The fund's experts believe that in order to keep inflation in the forecasted range, it is necessary to reduce the growth of lending to the economy by 25 percent against 43.5 percent in January-September 2018. About 60 percent of new loans were issued by the government and were financed from government sources, experts consider.

The IMF predicts GDP growth in Uzbekistan in 2018-2019 at the level of 5 percent, inflation at the level of 19.2 percent this year, and 14.5 percent - in 2019. In turn, according to the results of 2018, the Central Bank of Uzbekistan expects GDP growth at the level of 5.2-5.3 percent, next year - around 5.4 percent. The inflation rate is 16-17 percent and 13-15 percent, respectively.

According to official statistics, inflation in the consumer market of Uzbekistan at the end of 2017 amounted to 14.4 percent compared to 5.7 percent in 2016, its growth 2.5 times was due to the devaluation of the national currency - the soum - and the liberalization of the country's foreign exchange market. Central Bank of Uzbekistan devalvated sum almost doubled since September 5, 2017, and by the decree of President Shavkat Mirzieyev, legal entities and physical persons were able to freely buy and sell currencies at the market rate.

Uzbekistan is a doubly landlocked country in which 51 percentage of the population lives in urban settlements; the agriculture-rich Fergana Valley, in which Uzbekistan’s eastern borders are situated, has been counted among the most densely populated parts of Central Asia. Since its independence in September 1991, the government has largely maintained its Soviet-style command economy with subsidies and tight controls on production, prices, and access to foreign currency.

Despite ongoing efforts to diversify crops, Uzbek agriculture remains largely centered on cotton; Uzbekistan is the world's fifth-largest cotton exporter and seventh-largest producer.

Uzbek exports include energy products, cotton, gold, mineral fertilizers, ferrous and nonferrous metals, textiles, foodstuffs, machinery, automobiles.

Uzbek imports include machinery and equipment, foodstuffs, chemicals, ferrous and nonferrous metals.

On November 21, $1=8,276 Uzbekistani som.

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Abdul Kerimkhanov is AzerNews’ staff journalist, follow him on Twitter: @AbdulKerim94

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