Inflation expectations among the population and businesses in Uzbekistan continue to decline, reaching the lowest levels in recent years, according to a survey conducted by the Central Bank.
The survey revealed that in May, the average inflation forecast for the next 12 months stood at 13.7%, with a median forecast of 11%. These figures mark a significant decrease compared to earlier in the year.
At the beginning of the year, average inflation expectations reached 18.9%, with a median level exceeding 15%. Back then, approximately two-thirds of respondents expected an acceleration in price growth. However, the recent survey indicates that only 40% of respondents anticipate such acceleration.
The regions with the highest inflation forecasts were Tashkent (16.2%), Namangan (16%), and Khorezm (14.6%). On the other hand, residents of Karakalpakstan (11.3%) and the Navoi region (12%) had the lowest inflation expectations.
Currency fluctuations were identified as the most commonly mentioned factor potentially influencing the forecast, cited by 47% of respondents. The increase in wages was mentioned by 36% of participants, while the possibility of speculative price hikes was also noted by the same percentage of respondents.
Fuel prices continued to have a significant impact on inflation expectations, as mentioned by 32% of participants. However, only a quarter of respondents expected a possible increase in food prices.
Entrepreneurs also revised their inflation forecasts downward. In May, businesses anticipated an average annual price growth rate of 13.5%, with a median forecast just above 11%. Approximately 43% of surveyed entrepreneurs expected inflation to rise.
Similar to the general population, business representatives predominantly based their inflation forecasts on exchange rate dynamics (44%). Other important factors mentioned included wage and benefit growth (36%) and the rise in fuel and transportation costs (30%).
Less frequently mentioned factors were a deteriorating competitive environment (18%), issues with the supply of imported raw materials (17%), and price increases of imported raw materials (16%).
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