Inflation expectations dropped to a historic low in July

The Central Bank released information on the inflation expectations of the population and business entities for July.

According to the report, the annual inflation expectations of the population were at 12%, which is a 0.8% decrease compared to June.

The population expects the following factors to contribute to price increases in the future:

• Rising costs of communal services (51%);
• Increasing prices of fuel and energy (44%);
• Exchange rate fluctuations (39%);
• Artificial price increases due to monopolies (28%);
• Rising transportation costs (26%).

In July, the percentage of respondents cited the increase in communal service prices, fuel and energy costs, and exchange rate fluctuations as major inflationary factors decreased.

Inflation Expectations of Business Entities

By the end of July, the inflation expectations of business respondents for the next 12 months were 11.2%, a decrease of 0.7% compared to the previous month.

Business representatives believe that the following factors will contribute to price increases:

• Rising costs of communal services (50%);
• Increasing prices of fuel and energy (42%);
• Exchange rate fluctuations (38%);
• Rising transportation costs (31%);
• High tax burden (28%).

Among the survey participants, the highest inflation expectations were observed in the IT and media sectors (12.7%). The lowest expectations were noted among agricultural workers (9.7%). The most pessimistic expectations among business entities were in the food service sector (12.2%), while the most optimistic were in the tourism sector (9.8%).

In regional terms, the highest inflation expectations among the population were observed in Tashkent city (13.7%) and Surkhandarya region (13.5%), while the lowest were in Fergana (10.2%) and Tashkent region (10.7%). Among entrepreneurs, the highest expectations were in Tashkent city (12.6%) and Syrdarya region (12.3%), with the lowest in Andijan (9.7%).

Inflation expectations were above the national average among individuals with incomes of 5 million UZS or more. Those earning between 10-15 million UZS per month had inflation expectations of 13.6%.