BAKU, Azerbaijan, June 15. According to the baseline scenario of macroeconomic development, inflation rate in Uzbekistan is expected to decrease to 8.5-9.5 percent by the end of 2023, with a stronger influence from disinflationary factors than inflationary ones, Trend reports.
According to the estimations of the Central Bank of Uzbekistan, inflation expectations for the next 12 months continued their downward trend, dropping to 13.7 percent in May. The stability of domestic economic conditions has correspondingly led to a decrease in entrepreneurial expectations to 13.5 percent.
Maintaining moderately tight monetary and credit conditions and mitigating the impact of the external environment on prices are considered factors that restrain inflation. As the CBU forecasts, it is expected that fiscal expenditure growth rates and their role in stimulating the economy will remain high this year. In the context of the formation of accommodating fiscal conditions and high credit growth rates, the easing of monetary and credit conditions may exert additional pressure on prices.
Despite the overall decrease in inflation in recent months, high price growth rates for certain food products and service groups contribute to the preservation of current monetary and credit conditions. The transition of the baseline inflation and inflation expectations into a sustainable downward trajectory could create opportunities for reducing the key rate while maintaining moderately tight monetary and credit conditions in the economy.
The CBU noted, that it will continue to carefully assess the impact of monetary and credit conditions on aggregate demand, prices, as well as inflation expectations, focusing on monetary and credit instruments to keep inflation within the forecasted corridor.
The next meeting of the Central Bank Board to review the key rate is scheduled for July 27, 2023.