Tashkent, Uzbekistan (UzDaily.com) — The Consumer Confidence Index (CCI) in Uzbekistan partially recovered in July 2024 after three consecutive months of decline, rising from 125.9 to 128.4 points. Growth was observed in four out of five sub-indices, with the most significant increase seen in the sub-index for favorable conditions for major purchases. Compared to July 2023, the CCI remained almost unchanged.

The sub-index for favorable conditions for major purchases and expenditures improved significantly by 7.7 points, reaching 88.7 points, just 1.2 points below its record high. In July, 41.2% of Uzbeks chose a positive response, up from 38.5% in June, while the share of negative responses decreased by 5 percentage points.

Regionally, Andijan region showed a significant improvement, with the share of respondents selecting positive answers increasing from 36.2% to 46.9%, making it the leading region in July. Conversely, the share of positive responses in Khorezm region decreased by 3.9 percentage points. The lowest result was recorded in Tashkent region, where the share of positive responses fell slightly from 35.8% to 34.5%, just below the figure for Tashkent city.

The second sub-index with notable recovery was the 12-month economic outlook, which rose by a modest 2.1 points to 150.1 points. In July, 61.3% of respondents in Uzbekistan chose positive responses, slightly less than in June. The growth in this sub-index was largely due to a decrease in the share of pessimists from 9.6% to 8.2%.

Regionally, more significant changes were observed compared to June. Bukhara region saw the most significant increase, with the share of people expecting an improvement in the economic situation rising from 58.3% to 61.7%. On the other hand, Karakalpakstan saw a decline, with the share of optimists falling from 62.9% to 59.6%. Tashkent had the lowest share of positive responses at 51.4%, while Khorezm region led in July with a positive score of 66.9%, just 0.2 percentage points lower than in June.

Inflation assessments and expectations among Uzbeks remained largely unchanged, with only minor fluctuations. Over the past year, 42.6% of residents felt a significant increase in prices, down from 44% in June. Conversely, the share of those noticing price increases over the past month slightly rose from 22.2% to 22.7%.

Inflation expectations also showed a mostly neutral monthly trend after hitting all-time lows in June. The share of those expecting a significant price increase in the next month rose from 10.5% to 11.4%. Over the next year, 24.8% of respondents still expect faster price growth.

Official statistics recorded another month of deflation in July, slightly higher at 0.3%. This brought annual inflation down from 10.6% to 10.47%. Seasonal price declines for vegetables and fruits likely positively influenced residents’ sentiments. Vegetables fell in price by 5.6% month-over-month (m/m), and fruits and nuts by 11.2% m/m, whereas in July 2023, the latter had risen by 0.3% m/m. As a result, the share of respondents citing fruits and vegetables as the most inflationary items hit a new low of 13.1%, down from 17.2% in June and 43% in July 2023.

Significant declines were also observed for other previously troublesome categories, such as utilities and medications. The share of residents noticing significant price increases in utilities dropped from a record 50.4% in June to 44.8% in July. For medications, the figure fell from 32.2% to 23.9%. Nevertheless, these items remained in the top three, alongside the "Meat and Poultry" category, where the share of people noticing significant price increases rose from 42.2% to 45.2%. However, compared to July 2023, there was a noticeable improvement of 19.5 percentage points.

In July, devaluation expectations among Uzbeks declined, marking the third consecutive month of record lows. The Uzbek som strengthened for the fourth consecutive month, although less significantly than in previous months. The share of those expecting the national currency to weaken against the dollar over the next 12 months fell from 56% in June to 53% in July. On a one-month horizon, the share of pessimists decreased from 35.7% to 33%. Compared to July 2023, their share on these questions decreased by 16.6 and 21.8 percentage points, respectively.

After three months of consecutive index declines, likely driven by rising prices for certain items, Uzbekistan finally showed signs of recovery. The CCI increased by 2.5 points, largely due to improved conditions for major purchases. However, compared to July 2023, the index remained virtually unchanged, making Uzbekistan the only country in the region without progress on a year-over-year basis.

Overall, July 2024 was a positive month for all Central Asian countries compared to June. However, in comparison with 2023, Uzbekistan’s index remained unchanged.

Daniyar Orazbayev, an analyst at Freedom Finance Global, commented: "July 2024 was positive for all Central Asian countries. In Kazakhstan, the Consumer Confidence Index (CCI) continued to rise for the fourth consecutive month, becoming the third-highest reading in the history of the study. Overall, it’s difficult to single out one question showing significant progress. However, compared to last July, Kazakhs are more optimistic about the improvement in the economic situation. We also note another increase in the index in Kyrgyzstan, which for the second time in a row set a new record, maintaining its lead over Uzbekistan. This was due to another regional record in favorable conditions for major purchases. In addition, compared to July 2023, the CCI showed a significant increase of 11 points, including improvements in assessments and forecasts for the economic situation. The situation in Tajikistan, the regional leader in the index, changed drastically in July."

In Kazakhstan and Uzbekistan, analysts collect 3,600 questionnaires monthly, 1,600 in Kyrgyzstan, and 1,200 in Tajikistan, proportionate to the population of the countries under study. The research is based on a methodology used to calculate consumer confidence indices in many countries worldwide and adapted for local purposes by United Research Technologies Group. The data collection method is a telephone survey.

The survey questionnaire is adapted to the respondents’ native languages.