Tuesday, 23, January, 2018

The inflation rate in Uzbekistan is forecasted at about 14% in the year-end, and at 12-13% in 2018, Deputy PM/ Finance Minister Jamshid Kuchkarov announced at the 13th plenary session of the Senate on Wednesday, presenting the draft state budget for 2018.

He noted that President Shavkat Mirziyoyev instructed officials to report real figures and openly speak about the expected inflation rates.

"Frankly Speaking, before when Finance ministry voiced some statistical figures in the parliament, this caused many chuckles. Therefore, what we want to say on the inflation level to our senators, governors and mayors: the inflation rate will be high in the year-end, and we are expecting high inflation the next year as well. We want to speak openly about this now. However, we must ensure the uninterrupted supply of five or six basic food items at convenient prices for households, "he said.

Jamshid Kuchkarov emphasized that currently the government's forecasts differ from the estimates of the IMF, the World Bank, ADB, the Economic Commission for Europe and other international organizations by only a small margin of about 0.1-0.2%.

"We must admit honestly that in the past years, there were considerable discrepancies on a number of indicators. For example, the IMF strongly criticized our inflation calculation methods. However, after the September Presidential decree aimed at improving the statistics system and accession to the IMF's General Data Dissemination System, there have been major changes in the field of statistics. As a result, now no international financial institution has even a thought that Uzbekistan is doing wrong calculations," he said.

He stressed that the openness of statistical information and transition to international standards are not for the sake of meeting the demands of international organizations, but primarily to present the true figures  "as they are" to the people of Uzbekistan. This will also allow experts to see the real situation in the economy.

Commenting on the world prices, which influenced the state budget, Jamshid Kuchkarov touched upon the hike in gasoline prices by almost 30%, which was due to the a rise of Brent oil price in the last four months

Prices for most consumer goods and services are related to oil prices, he continued. However, if we do not free float the prices, we will never be able to reduce the inflation rate down to 4-5%, he noted.

Therefore, the head of state decided to shift to market based prices in 2017-2018 on many commodities. Starting from January 1, oil products, cement, cotton fiber, raw and other materials will be sold on the domestic market based on the market principles exclusively through commodity exchange trades.

The 2017 budget is expected with a surplus of 0.1% of GDP, said Jamshid Kuchkarov, stressing that, compared to previous years, the surplus will be "natural" rather than artificial.

Before, from December 15, the Treasury ceased spending. Now all expenses are being completely disbursed, there is no artificial restriction or halt of expenditure," the Deputy PM noted.

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