BAKU, Azerbaijan, Aug. 4
By Ilkin Seyfaddini - Trend:
Continued quarantine restrictions in Uzbekistan could lead to higher prices for major consumer goods, Trend reports citing Central Bank of Uzbekistan.
In Central Bank's monetary policy review for second quarter of 2020, the Central Bank of Uzbekistan presented the inflation forecast and the main drivers of price decline, as well as the risks and uncertainties that could affect the inflationary environment.
Given current economic situation and the degree of uncertainty amid the continuing COVID-19 pandemic, the bank maintains its inflation forecast for 2020 at 11-12.5 percent. At the same time, the Central Bank together with the Government will continue to take necessary measures to achieve constant inflation target of five percent by 2023.
The upward trend in core inflation (up from 12.7 percent in March 2020 to 13.8 percent in June 2020) during the second quarter demonstrates the persistence of inflationary pressures on the economy, the review said.
It is noted that a faster growth of core inflation, as opposed to general inflation, signals a strengthening of monetary factors of inflation.
“Preserving high rates of growth of lending to the economy (by 18.2 percent in the first half of 2020), the dynamics of increasing money supply (by 12.3 percent) and expansion of the consolidated budget deficit by the end of 2020 (by 8.4 trillion soum - $818.2 million at the end of the first half of 2020) will help curb the rate of inflation reduction,” the review said.
According to the calculations of Central Bank, the persistence of the negative GDP gap during 2020 and in subsequent years will contribute to the formation of disinflationary environment in Uzbek economy.
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