The Central Bank of Uzbekistan (CBU) has set a target to curb inflation, aiming to reduce the inflation rate to 5% by the end of 2025, CBU reported. This announcement comes as part of the bank's ongoing efforts to stabilize the country's economy and ensure sustainable growth.
The forecast is built on the current monetary policy framework, but challenges lie ahead as inflation rates are expected to rise in the coming months. Projections suggest that by mid-year, the annual price index could escalate to 9%, before stabilizing within the 8–9% range by the year-end.
One of the primary drivers behind this anticipated inflationary surge is the impending increase in prices for goods and services subject to government regulation. Tariffs for utilities and energy are set to rise, alongside hikes in railway ticket costs. Additionally, the abolition of zero VAT on essential items such as medicines, medical services, and housing and communal services for the population is expected to contribute to the inflationary pressure.
Furthermore, the prices of fruits and vegetables may also experience an uptick due to several pro-inflationary factors. Climate change-induced disruptions, water scarcity issues, and challenges with energy supply to greenhouses are likely to impact agricultural output, thereby affecting prices in the market.
The Central Bank's decision reflects its commitment to maintaining price stability and fostering a conducive environment for economic development. By curbing inflation, the bank aims to safeguard the purchasing power of consumers and support sustainable economic growth.
In 2023, the banking sector in Uzbekistan witnessed a substantial rise in cash inflows, totaling UZS 669 trillion (equivalent to approximately $53.6bn), representing a 28% increase compared to the preceding year. The analysis reveals that cash inflows to banks surged by 20% throughout the year, reaching UZS 414 trillion (about $33.2bn). Despite this significant increase, the proportion of cash within the total cash inflows decreased from 66% to 62%, in contrast to the 69% recorded in 2021. Conversely, transactions through terminals experienced a notable surge of 44%, amounting to UZS 255 trillion (approximately $20.4bn). This surge contributed to a rise in their share from 34% to 38%, compared to 31% in 2021.
Follow Daryo's official Instagram and Twitter pages to keep current on world news.
Comments (0)