In-depth Analysis of Money-Credit Policy of Uzbekistan in 2017

Inflation
According to the State Statistics Committee of Uzbekistan, in January-October 2017, the inflation rate for the consumer price index was 9.3 percent. The rapid growth of lending in the first half of this year, as well as volumes of money supply and devaluation of currency rates, became the main reason for high inflationary pressures in the economy. At the same time, along with monetary factors, the traditional seasonal and supply factors also had a significant impact on the inflation level.
Food and non-food products have risen in higher inflation rates than in services. In particular, the prices for foodstuffs increased by an average of 9.4% (by 2.5% in 2016), the overall inflation rate was 4.1%. The group of products has seen a significant increase in prices for some types of fruits and vegetables due to a significant increase in prices for beef, lamb and poultry and sugar, as well as seasonal factors. At the same time, the rapid rise in prices for some foodstuffs is due to the volatility of their domestic market supply in the winter and spring of 2016/2017, due to the fact that the output or volume of these products is not at the levels prescribed for various reasons (diseases, pests, etc.) interpreted.
As a result of the significant increase in the volumes of certain types of food products, the decrease in the supply of these products on the domestic market was observed. In particular, in January-August, carrots exports increased by 3 times, apples exports by 2.3 times, and tomatoes exports by 1.4 times. In addition, the launch of egg exports this year is also seen as one of the factors affecting the domestic market price by 10 percent.



Source: Based on the data from the State Statistics Committee of the Republic of Uzbekistan
Prices for non-foodstuffs increased by 10.3 percent (7.2 percent in the same period of 2016) and the impact on general inflation was 3.7 percent. Prices for clothes rose by 10.9%, shoes by 10.2%, construction materials by 10.7%, basic household goods by 11.5%, washing and cleaning products by 11.2%, cultural goods by 9.5%, communications means increased by 10.7 percent. These prices were mainly influenced by the increase in import prices due to high devaluation of the exchange rate[ CITATION The173 \l 1033 ].
The tariffs for services increased by 7.2 percent (an increase of 9.6 percent in January-October 2016), affecting the overall inflation rate of 1.5 percent. At the same time, housing and communal services increased by 6.8%, passenger transportation by 6.9%, railway transport by 17.7%, air transport by 48.2%, communication services by 23.8%, preschool education increased by 3%. Taking into account the dynamics of prices this year, the annual inflation rate is projected at 12-14 percent.