Central Bank expects 6.2% economic growth by year end

As it was previously reported, the Central Bank decided on July 25 to lower the key rate to 13.5% per annum.

In a press release, the regulator notes the continued economic growth in Uzbekistan, driven by industry, construction, and the services sector. The real GDP growth for the half-year was 6.4%.

Investment activity, particularly the inflow of direct foreign and private investments, remains at a high level. The Central Bank raised the economic growth forecast for the year to 5.7-6.2%.

From April to June, the inflow of foreign currency through various channels increased, contributing to the stabilization of the UZS’s exchange rate. The Central Bank expects that export revenues and remittances will continue to grow amid economic growth in partner countries and favorable global price conditions.

At the same time, "some moderation" in consumer demand is expected, caused by "structural changes" in household and business expenditures. Maintaining moderately tight monetary policy will contribute to the balance of supply and demand, according to experts.

Current monetary conditions increase the attractiveness of savings in UZS and stimulate deposit growth. This is evidenced by the dynamics of deposit volumes and lending, as well as the overall liquidity of the banking system.

However, "some pro-inflationary risks" remain until the end of the year. According to the Central Bank, these are related to the uncertainty regarding the dynamics of inflation expectations and the high level of core inflation in the services sector.