Tashkent, Uzbekistan (UzDaily.com) -- The consumer confidence index of Uzbek citizens in April 2024 again showed a decline after recovering in March, returning to the February level and reaching 130.2 points, which is 5.6 points lower in April, Freedom Finance Global said.

The decrease was uniform and recorded in almost all five subindices (by 5.1–5.5 points). The greatest drop was shown by assessments of changes in the economic situation over the past 12 months. The sub-index of changes in the economic situation fell by 6.8 points, reaching 125.3 points, which is the lowest level in the last nine months. Now only 53.5% of Uzbek residents believe that the economic situation has improved over the past 12 months, while this figure was 58% in March.

Regionally, a decrease in the indicator was observed in all regions except Navoi and Syrdarya. In Navoi region, the share of respondents who chose positive answer options increased from 54.6 to 57.2%. In other regions of the country, the opposite trend was recorded, especially pronounced in the Republic of Karakalpakstan, where the indicator fell from 62.8 to 53.6%. A noticeable decrease was also noted in Khorezm (-8.7 p.p.), Kashkadarya (-7 p.p.) and Namangan (-3.5 p.p.) regions. However, Khorezm region continues to lead with the share of respondents who noted an improvement in the economic situation at 60%. The worst results were again shown by residents of Tashkent, where this figure was 37.2%.

The subindex of economic forecasts for the next 12 months also fell significantly in April, but its indicator was 153.6 points, indicating a large predominance of positive opinions over negative ones. 64.4% of Uzbek citizens surveyed believe that the economic situation will improve, although in March this figure was 68.3%.

Regionally, there were no areas where results improved. However, in Navoi and Syrdarya regions, the regional subindex remained at the March level. Economic forecasts deteriorated significantly in Khorezm region, where the share of positive responses decreased from 73.1 to 63.5%. A noticeable decrease was also noted in Jizzakh, Surkhandarya and Tashkent regions. In the first two, the share of respondents who chose positive answer options decreased by 7 percentage points, and in the Tashkent region - by 6 percentage points. The Namangan region, one of the leaders in March, retained its leadership with a share of optimists of 74.8%. The worst result was again recorded in the capital, where this figure reached 55.4%.

In April, inflation estimates and expectations of residents of Uzbekistan increased noticeably. Thus, over the past year, 47.8% of residents experienced a very strong increase in prices compared to 42.8% in March. The share of those who felt a strong increase in prices over the past month increased from 20.3% to 25.5%. The first indicator turned out to be the highest over the last six months, and the second - over the last four months.

As for inflation expectations, a similar picture is observed. The share of those expecting strong price increases next month rose sharply from 12.2% to 16.5%. Over the one-year horizon, 32.6% of respondents expect faster price growth, while in March this figure was 26.4%. This is the second highest figure for the entire study; a higher value was recorded only in July 2023.

The sharp change in sentiment is due to objective reasons. In April, monthly inflation reached 0.93% against 0.67% in March, and annual inflation accelerated from 7.98% to 8.08%. The decisive factor was the abolition of the zero VAT rate on medicines and utilities. As a result, these categories became leaders in the list of goods and services for which strong price increases were noticeable, according to the survey. If in March 21.4% of residents noticed an increase in prices for housing and communal services, then in April this share increased to 31.8%, which is the second highest value after meat and poultry (43.8%). Medicines and drugs took third place with a score of 29.1%, up from 24.8% in March. The share of those who noticed a sharp increase in prices for sugar and salt also increased significantly: from 17.9% to 23.2%.

Official data confirms these observations. In April, tariffs for cold water and sewerage increased by 18%, for garbage collection - by 13.3%, for hot water - by 12.5%, and for central heating - by 12.1%. Medicines have increased in price by 9.7% on average. Similar levels of price growth are observed for therapeutic, preventive and protective devices. Prices for granulated sugar increased by 3.3%.

Devaluation expectations of residents of Uzbekistan also showed a slight increase, almost reaching record values for the entire period of the study. The share of those who expect the soum to weaken against the dollar over the next 12 months increased from 70.2% in March to 71.4% in April. Over a one-month horizon, the share of pessimists continued to grow for the third month in a row: from 51.8% to 53.5%. Although in April the soum strengthened slightly against the dollar, decreasing by 0.12% at the end of the month, in early April this currency pair reached new records.

In April 2024, the consumer confidence index (CCI) in Uzbekistan showed a significant decline, returning to February values after recovering in March.

According to Freedom Finance Global analyst Daniyar Orazbayev, this decline is due to the abolition of the zero VAT rate on medicines and utilities, which led to a sharp increase in prices for these goods and services. Inflation estimates and residents’ expectations also increased noticeably, which was reflected in the survey results.

While Kazakhstan’s CCI index is recovering after four months of decline, Uzbekistan has seen a sharp decline. Despite this, Uzbekistan retains second place in CCI among Central Asian countries, second only to Tajikistan. In Kyrgyzstan and Tajikistan, changes in the index turned out to be less significant, but Kyrgyzstan has come close to Uzbekistan and can overtake it if the current dynamics continue.

The consumer confidence survey is conducted monthly using telephone surveys. In Kazakhstan and Uzbekistan, data is collected from 3,600 respondents, in Kyrgyzstan - from 1,600, in Tajikistan - from 1,200. The research methodology is based on international standards and adapted by United Research Technologies Group to local conditions. Surveys are conducted in the respondents’ native language, which allows them to more accurately reflect the mood of the population in each country.

Thus, April 2024 showed different trends in the countries of Central Asia: in Kazakhstan - a recovery in the consumer confidence index, in Uzbekistan - its fall, and in Tajikistan and Kyrgyzstan - minor changes. Inflation and devaluation expectations in Uzbekistan continue to rise, indicating instability in economic sentiment among the population.