IMF projects Uzbekistan’s annual inflation rate to be slightly less due to food price pressure

Finance Materials 28 April 2021 10:06 (UTC +04:00)
IMF projects Uzbekistan’s annual inflation rate to be slightly less due to food price pressure

BAKU, Azerbaijan, Apr. 28

By Klavdiya Romakayeva - Trend:

The annual inflation rate in Uzbekistan in 2021 will amount to slightly less than 10 percent due to food price pressure, Trend reports with reference to the International Monetary Fund IMF report.

According to the information, the economy of Uzbekistan rebounded sharply in 2H2020 and Uzbekistan was able to post positive overall growth in 2020, at a rate of 1.6 percent.

Similarly, while the current account deficit at 5.5 percent of GDP was almost equal in size as in 2019, trade flows were considerably depressed. Inflation continued to gradually decline in 2020, but higher increases in food prices kept overall inflation in the low double digits, ending the year at just over 11 percent.

According to the IMF, growth is expected to pick up in 2021. With the rollout of COVID-19 vaccines globally, a recovery of trading partner growth, and building on the domestic recovery, the economy is projected to grow by about five percent in 2021.

Also, the current account deficit is projected to widen slightly, to about 6.5 percent of GDP, as imports are expected to recover faster than exports. Inflation is projected to decline marginally, to just below 10 percent by end-2021 due to food price pressures and government wage increases.

IMF experts consider that Uzbekistan needs to create "strong and independent" institutions for a fair market economy.

“Although the pandemic hit the economy hard in the first half of 2020 and inflicted considerable hardship, strong and timely containment and support measures moderated the recession,” the report says.

It is noted that a forceful public health response and the deployment of a comprehensive set of fiscal, monetary, and financial measures, made possible by substantial buffers owing to prudent macro-economic policies in preceding years and to sizable international support.

As a result, activity rebounded in the second half of 2020 and Uzbekistan was among the few countries posting positive growth in 2020.


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