Uzbekistan’s Central Bank board convened and decided to keep the key interest rate unchanged at an annual level of 13.5% on October 31. This decision comes in light of persistent inflationary pressures driven by high consumption and investment activity, along with fluctuations in the supply of various goods and services.
In its assessment, the Central Bank emphasized the importance of maintaining strict monetary and credit conditions to achieve a stable reduction in inflation and meet the medium-term target of 5%. The board's decision reflects forecasts for macroeconomic development and expectations surrounding inflation factors.
According to the Central Bank, inflationary processes are anticipated to decline somewhat in the last quarter of 2024 due to the ongoing strict monetary policies, with general inflation projected to be around 9.5% by year-end.
From January to September 2024, the economy demonstrated robust growth, with a real gross domestic product (GDP) increase of 6.6%, supported by positive dynamics across key sectors. Additionally, the growth of cross-border remittances compared to the previous year has bolstered household incomes, while high real interest rates in the banking sector have stimulated savings among the population.
Given these economic trends, real GDP growth for 2024 is expected to be in the range of 6.0% to 6.5%. However, the Central Bank cautioned that potential risks may emerge that could heighten inflation, particularly from insufficient supply and short-term price fluctuations in energy resources, as well as disruptions in the availability of certain goods and elevated service costs.
The Central Bank reiterated its commitment to a monetary policy aimed at achieving the 5% inflation target, highlighting the necessity of balancing supply and demand, managing inflationary expectations, and advancing structural reforms within the economy.
Earlier this year, on July 25, the main rate was reduced by 0.5 percentage points, marking a significant moment as it fell below 14% for the first time in seven years.
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