IMF forecasts inflation acceleration in Uzbekistan in 2024 amid rising tariffs

The International Monetary Fund (IMF) anticipates an acceleration of inflation in Uzbekistan in 2024, as stated in the institution's April review.

Last year, economic growth reached 6%, which is 0.3 percentage points higher than the figure in December. The improved assessment is attributed to increased budget expenditures, high growth in salaries, and exports. However, the IMF now expects an economic slowdown to 5.2% this year and 5.4% for 2025.

In the current year, inflation is set to accelerate to 11.6%, up from 10% last year. Thus, the inflation growth forecast has been worsened by 0.6 percentage points.

In 2025, the rate of inflation is expected to slow down to 9.7%, which is twice the target that the Central Bank aims to achieve. By 2029, inflation may stabilize at 5%.

Additionally, over the next two years, the poverty level is set to consistently decrease by one percentage point — from 8.4% in 2023 to 7.4% in 2025.

In the IMF's December review, it was noted that the increase in regulated energy prices would lead to inflationary growth. Nevertheless, the inflationary impact of tariff indexation will be partially offset by the Central Bank's tight monetary policy and significant consolidation of the state budget.

In October 2023, tariffs for electricity and natural gas for legal entities were raised. Starting May 1, tariffs for electricity and natural gas for the population are increasing, and consumption norms for energy resources are being established. Businesses are required to revert to a 100% prepayment for energy resources.

Another increase in electricity and gas tariffs for individuals is planned for April of next year. The Ministry of Economy and Finance cited the growth of inflation, which has increased by 66% over the past five years, as the reason.