The Central Bank has revised its GDP projection for the current year. Based on the available reserves in the economy and the dynamics of aggregate demand, real GDP growth in 2022 is expected to be at 5-5.5% per annum, while in April the forecast was 3.5-4.5% growth.
This statement was made at a meeting of the Board of the Central Bank on July 21, at which it was decided to cut the interest rate by 1 percentage point to 15% per annum.
The regulator explains this decision by the fact that the relative stabilization of the macroeconomic situation by reducing the impact of short-term external shocks in May-July and the postponement of plans to increase regulated prices increase the likelihood of inflation below the median estimate of the forecast corridor of 12-14% per annum, that is, its bottom border.
This, in turn, allows to eliminate the additional burden added to the projected inflation rate in April due to the short-term impact of factors and expectations, respectively, to change monetary conditions, the regulator notes.
“Taking into account global inflationary processes, in order to maintain the minimum impact of monetary factors on inflation and maintain the relative attractiveness of assets in the national currency, “relatively tight” monetary conditions will remain in the economy until the end of this year,” the Central Bank believes.
In June-July, external economic conditions for Uzbekistan were relatively stable. In June, the real effective exchange rate depreciated by 0.2% versus May.
In international trade operations, there was an upward trend in both export earnings and import payments. In the second quarter, export earnings grew by 41% compared to the first quarter, and import payments - by 19%.
In April-June, the inflow of foreign currency was higher than the annual seasonal growth rates (from exports, remittances and foreign credit lines), which is a factor in supporting the supply of foreign currency in the domestic foreign exchange market, the Central Bank noted. In particular, in the second quarter, the sale of foreign currency by banks and business entities increased by 1.8 times compared to the first quarter.