Central Bank reports drop in inflation expectations amidst currency concerns
Inflation expectations among citizens and businesses have shown a decline in October following two months of increase, according to the Central Bank of Uzbekistan.
The latest survey indicates that the anticipated inflation rate for the next 12 months now averages 12.8%, down 0.5% from September’s level, with a median projection of 10.9%, a slight decrease of 0.2%.
The survey highlights regional disparities in inflation expectations, with the Tashkent region recording the highest projections at 14.8%, followed by Samarkand and Syrdarya at 13.9%. In contrast, the lowest expectations came from Karakalpakstan (10.8%), Bukhara and Navoi (11.4%), and Tashkent city and Surkhandarya (11.6%).
In terms of occupational differences, professionals in household services (14.1%), education (13.7%), and construction (13.6%) sectors expressed the highest inflation expectations, while those in industrial (10.6%), food service (11.5%), and tourism (11.6%) sectors reported more conservative outlooks.
Income levels also influenced inflation projections. Households earning between 10 and 15 million UZS per month expressed the highest expectations (14.4%), followed by those with monthly incomes over 15 million UZS (13.9%) and 7–10 million UZS (13.5%). In comparison, citizens earning below 2 million UZS per month reported lower expectations (12.1%).
The survey identified currency fluctuations as the main driver of inflation expectations, cited by 51% of respondents. Other significant factors included rising utility tariffs (47%) and energy prices (46%). The influence of wage and pension increases declined sharply, noted by only 31% of respondents in October.
For entrepreneurs, inflation forecasts similarly decreased, with an average expected rate of 12%, down by 0.6 percentage points. Regional expectations were highest in Navoi (14.4%), Andijan (13.6%), and Tashkent and Jizzakh (12.7%), while the lowest were in Karakalpakstan (10%), Namangan (10.6%), and Bukhara (10.9%).
Sector-specific expectations among businesses were highest in transportation (13.6%), education (13.2%), and cultural services (12.6%), while agriculture (11.1%), trade (11.6%), and construction (11.7%) showed more moderate outlooks.
Currency fluctuations (50%), along with utility and energy cost increases (42% each), remained the top concerns for business owners, followed by wage increases (30%) and transportation costs (29%).
This decrease in inflation expectations reflects optimism in the economic outlook, albeit tempered by ongoing concerns over exchange rate volatility and living costs.
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