Inflation Expectations Drop in Uzbekistan

In September, inflation expectations in Uzbekistan decreased, as reported by the Central Bank. On average, the population expected a 13.5 percent increase in prices, which is a 0.7 percent drop from August. Entrepreneurs' expectations also decreased to 14.2 percent, down by 0.2 percent.

The most pessimistic expectations were in Tashkent, where residents anticipated a 15.2 percent inflation rate for the next 12 months (a 0.1 percent decrease), while business forecasts worsened significantly to 17.2 percent (a 1.7 percent increase). In Surkhandarya, expectations were 14.9 percent (a 1 percent increase) for residents and 12.7 percent (a 0.6 percent decrease) for businesses. In Bukhara, it was 14.7 percent (a 0.9 percent increase) for residents and 13.5 percent (a 0.6 percent decrease) for businesses. In Syrdarya, expectations were 13.8 percent (a 1.9 percent decrease) for residents and 14.5 percent (a 0.3 percent increase) for businesses. The most optimistic expectations were in Karakalpakstan: 11.6 percent (a 2.5 percent decrease) among the population and 12.3 percent (a 0.7 percent decrease) among businesses.

In surveys conducted in September, concerns about the exchange rate's growth slightly decreased, with businesses going from 71 percent to 68 percent and the population from 70 percent to 65 percent. In August, the soum saw a sharp devaluation of 400 soums but then remained relatively stable.

The population expected price increases in the next 12 months due to rising fuel and energy prices (45 percent, up from 43 percent in August, increasing for the fifth consecutive month), utility tariff hikes (34 percent, up from 27 percent), and artificial price increases (33 percent, up from 32 percent).

Businesses also believed that inflation would be affected by rising fuel and energy prices (42 percent, up from 38 percent), utility service costs (31 percent, up from 24 percent), and transportation service prices (28 percent, up from 25 percent).

This time, the Central Bank did not publish respondents' answers on inflation expectations. In August, nearly 30 percent of respondents expected inflation to be at the official forecast level of 9-12 percent by year-end, but an increase in the percentage of respondents forecasting higher inflation rates was recorded, ranging from 13-16 percent, 17-20 percent, 21-25 percent, and even 31-50 percent (14 percent).