Uzbekistan's inflation forecast for 2020 remains unchanged

Finance Materials 16 January 2020 16:02 (UTC +04:00)
Uzbekistan's inflation forecast for 2020 remains unchanged

BAKU, Azerbaijan, Jan. 16

By Fakhri Vakilov-Trend:

Uzbekistan’s Central Bank has maintained a basic inflation forecast for 2020, which is set at 12-13.5 percent, Trend reports with reference to the Central Bank.

According to the results of last year, the indicator amounted to 15.2 percent.

The prerequisites for lowering inflation by the end of the year are based on a number of forecast estimates.

One of them includes the exhaustion of the effects of some inflationary impulses that arose in 2019 and the forecast for a slower rise in prices of food and non-food products, given that prices for many of these products have already adjusted to an average level in the Central Asian region, as well as in other major countries trading partners.

Another forecast estimate is based on the projected growth in agricultural production, textile and construction industries will contribute to an increase in supply in the domestic consumer market. An important factor in this will be the gradual improvement of the competitive environment.

The estimates also take into account ensuring moderate credit growth through appropriate monetary and macroprudential policies, as well as optimizing government spending and the overall fiscal deficit will prevent excessive demand growth in the economy, thereby reducing pressure on inflation and the exchange rate.

“The projected moderate increase in the nominal level of population’s income in 2020, including the average level of wages after their significant adjustment in 2018-2019, will also help reduce the influence of demand factors,” the Central Bank said.

At the end of 2019, inflation was near the upper boundary of the forecast corridor (13.5-15.5 percent) and amounted to 15.2 percent. The main acceleration occurred in the second half of the year as a result of liberalization of regulated prices (an increase of 21.6 percent), as well as a more rapid devaluation of the national currency in August 2019.


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