CB forecast: Inflation in 2019 will not exceed 15%

Chairman of the Central Bank of Uzbekistan Mamarizo Nurmuratov believes that inflation in 2019 will not exceed 15%. He said this at a press conference with participation of representatives from the International Monetary Fund (IMF).

“I think, it will be possible to keep the inflation rate in the range of 13,5-15%,” Nurmuratov said. At the end of 2018, the figure was 14,3%.

At the same time, he noted that achieving the specified inflation rates by only using the tools of monetary-credit policy of the regulator is a very difficult task.

“Therefore, the focus will be paid on working together with the economic bloc of the government and calculating all their actions, taking into account the impact on inflation. We hope that such cooperation will allow us to achieve inflation targets by the end of the year,” the head of the Central Bank added.

Forecasts of the IMF inflation experts roughly coincide with a vision of the Central Bank of Uzbekistan. The representatives of the fund published a conclusion in which it is stated that “lately inflation has remained at a moderate level, but factors of increased inflationary pressure remain”.

“It is expected that in 2019, inflation will fluctuate at around 15%. It is mainly due to the late impact of the increase in energy tariffs for enterprises in November 2018, significant wage growth, as well as the forecasted increase in VAT collection due to a substantial increase in the number of companies paying VAT,” the IMF materials say.

Thus, the fund's experts predict inflation for the year at the level of 15,6%, in 2020 – 12,4%, in 2021 – at around 9,1%.

One of the main factors that leads to increase in inflation is called “excessive credit growth”. Taking into the ongoing inflationary pressures, the monetary-credit policy rate should remain tight, the fund says.