Uzbekistan’s central bank has decided to keep its main interest rate unchanged at 14% per annum.
“The decision was made in order to ensure a balance between achieving the forecast inflation indicators by the end of the year and maintaining economic growth in the context of recovery of economic and investment activity,” the regulator said in a statement. “In recent months the weight of factors that may increase inflation has become relatively high, which requires accelerating measures to curb inflationary processes”.
The annual inflation rate in May expanded to 10.9%, slightly accelerating compared to April (10.7%). The annual core inflation rate was 10.9%.
The change in food prices, on the one hand, was caused by a significant increase in world prices for vegetable oil, sugar and meat products, on the other hand, with changes in weather conditions observed in the winter-spring period, which delayed the harvest of fruits and vegetables and lowered expectations relative to last year’s figures.
The annual increase in prices for non-food products and tariffs for services had a downward impact on overall inflation, and in May amounted to 8.2% and 8.5%, respectively.
The regulator also underlined increased Inflation expectations. The inflation expectations of the population and business entities amounted to 16.4% and 16.5%, respectively.
In January-April, the volume of industrial production increased by 6.6% YoY and the volume of services provided soared by 19.8%.
Fiscal stimuli are set to be the main factor supporting economic growth and investment activity in the country until the end of the year. The overall budget deficit is projected to be higher than last year, and the growth of social benefits, pensions and salaries is set to lead to an increase in consumer demand.
According to the updated forecasts of the International Monetary Fund (IMF), the GDP growth of the main trading partners – Russia, China and Kazakhstan – changed in a positive direction in April.
Gold prices on the world markets in April-May continued their recovery, having approached the indicators of the beginning of the year in June.
Uzbekistan’s export in January-May (excluding gold and gas) amounted to $3.9 billion, up 1.5-fold YoY.
The volume of cross-border transfers to the country during five months of 2021 amounted to $2.6 billion, up by 43%. (Uzreport/Business World Magazine)