The Executive Board of the Central Bank of Uzbekistan, in its meeting on March 14, 2024, decided to keep the main interest rate at an annual level of 14%. The decision to maintain the key rate is aimed at ensuring the necessary monetary and credit conditions to bring down inflation to the 5% target. This decision takes into account the remaining uncertainties and inflationary expectations concerning the balance of demand and supply in the economy.
Inflation trends
The general inflation rate saw a decrease since the start of the year, standing at 8.3% in February. However, inflation in services has seen an acceleration in recent months due to increased demand and a series of regulated price and tariff hikes. The inflationary expectations of the population and entrepreneurs remain high and almost unchanged.
By the end of 2024, inflation is projected to be within the 8-9% forecast range. Uncertainties persist regarding regulated price changes and their impact on inflation expectations over the forecast period.
The ongoing inflationary trends are linked to the limited flexibility of some supply elements in adapting to increased demand. At the same time, surveys indicate that both observed inflation and inflation forecasts continue to be high, highlighting the existing difficulties.
Macroeconomic scenario for 2024
The macroeconomic scenario for 2024 depends on external and internal factors, including structural reforms, budget discipline, and the effectiveness of monetary policy. The Central Bank remains vigilant, taking measures to mitigate potential one-off impacts on domestic prices.
Real GDP growth for 2024 is forecasted at 5.5-6%, driven by consumer demand and increased investments influenced by structural reforms. The Central Bank commits to making future decisions on the key rate based on updated inflation forecasts, ensuring the necessary monetary conditions to achieve the 5% inflation target.
The next meeting of the Central Bank’s board is slated for April 25, 2024.
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