Inflation rate in Uzbekistan’s consumer sector for 2017 revealed

Business Materials 9 January 2018 15:37 (UTC +04:00)

Baku, Azerbaijan, Jan. 9

By Nigar Guliyeva – Trend:

Inflation rate in Uzbekistan’s consumer sector was 14.4 percent in 2017, the press service of the country’s State Statistics Committee said in a statement.

In 2017, food products rose in price by 15.9 percent, non-food products - by 16.1 percent, services - by 8.6 percent, according to the statement.

With a 1.1 percent average monthly increase in consumer prices, the most significant growth in prices was observed in November and December 2017 (2 percent and 2.7 percent growth for the month), the minimal price increase was observed in June and July (0.3 percent and 0.4 percent growth per month).

The devaluation of the Uzbek national currency, the soum, and the policy pursued to liberalize the national currency led to acceleration in the inflation rate and affected the overall growth in prices of goods and services.

In particular, in the first half of 2017, consumer prices grew 5.2 percent, and for the last four months of last year alone (September-December 2017), the prices grew 7.6 percent. This is mainly related to the increase in prices of imported goods, as well as the increase in production costs and increase of prices by Uzbek producers supplying their products to the domestic market. For example, retail prices for cars produced in Uzbekistan grew in average 1.5 times for the year.

The increase in gasoline prices from November 2017 by 39.7 percent led to an increase in the consumer price index (CPI) by 0.5 percentage points. As practice shows, the increase in prices for gasoline indirectly affects the increase in prices of other goods and services (due to increased costs of their production and transportation).

The increase in tariffs for housing and communal services by 7.1 percent had an impact on the level of inflation, providing an increase in the CPI by 0.4 percentage points.

As one more factor of acceleration of inflationary processes in Uzbekistan, one may mention expectations of the country’s population and facilities concerning forthcoming rise in prices and this may cause increase in prices even in the absence of any objective factors. Due to inflationary expectations, consumers start to stock up on goods for future use, and this further stimulates growth in prices.

The slowdown in the inflation rate in the summer months is mainly due to seasonal trends and abundance of fruits and vegetables in the market. This led to the decrease in prices for fruits and vegetables (by 13.8 percent in June, by 14.9 percent in July and by 4.6 percent in August).

Food products for the year rose in price by 15.9 percent in average, and this ensured a total increase in the CPI by 6.9 percentage points.

The dynamics of price changes by months during the year varied. Due to seasonal trends in June and July, food prices fell by 1 percent and 0.7 percent for the month, while food prices grew the most in December 2017 (4.4 percent growth for the month).

Non-food products for 2017 rose in prices by 16.1 percent, which led to an increase in the CPI by another 5.7 percentage points.

About 4 percentage points or 27.4 percent of the total increase in the CPI is associated with growth in prices for clothing, footwear, fabrics and household textiles, construction materials, cultural goods, personal care products, personal transport and gasoline.

Prices and tariffs for services for the Uzbek population grew by an average of 8.6 percent over the year, which led to an increase in the consolidated CPI by 1.8 percentage points.

Increase in tariffs for communication services by 23.9 percent, legal and banking services by 15 percent, household services by 8.3 percent, housing and communal services by 7.1 percent, passenger transport services by 6.9 percent were the main inflation factors. This affected the growth of the CPI by 1.4 percentage points.

According to the International Monetary Fund (IMF), inflation rate in Uzbekistan will be 14.3 percent in 2018. In turn, the Central Bank of Uzbekistan forecasts inflation rate within 11.5-13.5 percent in 2018.