Uzbekistan’s central bank on December 14 decided to keep its key rate unchanged at 14%.
Annual inflation in the country edged down to 8.8% in November from 8.98% in October, the regulator noted, but advised: “In the coming quarters, external factors may manifest themselves, fuelling inflation, against the background of non-market restrictions, fragmentation of international trade and another indexation of regulated prices.”
Despite an evident slowdown in core inflation, pricing pressure on some goods was increasing and it would take some time to counteract the situation, the central bank said.
The inflation expectations of the population and businesses have formed at a level above the inflation rate at around 13-14%, it observed.
Economic activity was supported by a growth of private investment, the services sector and high consumer demand, which was driven by increased government spending and retail lending, the central bank said. In the future, rising wages and real incomes might support consumer activity, creating inflationary risks, it also stated.
The regulator’s inflation target is 5% by 2025.
The central bank emphasised that to achieve long-term price stability, it would be necessary to reduce the budget deficit and introduce market principles in the economy.
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