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Uzbekistan's annual inflation declines despite global pandemic

Uzbekistan Materials 1 February 2021 17:53
Uzbekistan's annual inflation declines despite global pandemic

BAKU, Azerbaijan, Feb. 1

By Klavdiya Romakayeva - Trend:

Uzbekistan's annual inflation in 2020 declined from 15.2 percent to 11.1 percent despite COVID-19 pandemic, Trend reports with reference to Fitch Ratings Agency.

The mentioned issue was discussed during webinar on macroeconomic prospects and the banking sector of Uzbekistan, which was attended by the representative of the Ministry of Finance of Uzbekistan, the experts of the international rating agency Fitch Ratings, foreign investors, representatives of international banks and organizations.

The representatives of Fitch Ratings noted that despite the COVID-19 pandemic in Uzbekistan, GDP growth amounted to 1.6 percent, annual inflation decreased from 15.2 percent to 11.1 percent, and a sharp increase in the budget deficit was prevented. In their opinion, this reflects the stable macroeconomic situation in the country.

In addition, Fitch Ratings Senior Director Eric Arispe said that in the context of the global crisis and the downgrade of sovereign credit ratings, Uzbekistan's credit rating in 2020 remained at 'BB-' (Stable Expectations).

According to an international expert, this was influenced, in particular, by external and fiscal reserves of Uzbekistan, including net sovereign foreign assets, higher than those of countries rated “BB”, a moderate level of liquid assets of the Fund for Reconstruction and Development and the government, as well as the stability of public finances and growth rates.

Arispe also emphasized Uzbekistan’s rapid anti-crisis measures, attracting external financing and the specifics of the economy, as the main factors of economic growth in Uzbekistan.

In addition, the growth of public debt in recent years, the dynamics of public debt is below the value of countries rated 'BB'. At the same time, there is confidence that the established limits on public debt would lead to its stabilization in the medium term.

The representative of Fitch Ratings also emphasized the need for a coordinated fiscal and monetary policy to maintain the macroeconomic balance, finance the current account deficit, mainly through foreign direct investment, and ensure a moderate level of lending to the economy.

Furthermore, it was noted that as a result of the reforms carried out in Uzbekistan in recent years, the country's institutional indicators are gradually improving.

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