Inflation closes in on medium-term target in October

According to the Agency of Statistics under the President of the Republic of Tajikistan in October, 2017 the inflation rate made 0.4%in monthly terms and 6.0% to December of the previous year.

Thisrate of inflationwas anticipated and as expected mainly occurred due to influence of nonmonetary factors,particularly with seasonal rise in prices for some food productsin month-on-month basis (tomatoes by 1.8 times, cucumbers by 2.2 times, watermelons by 49.9%, melons by 17.9%, potatoes by 4.5%, eggs by 3.4%) and prices for housing and public utilities (electric power supply by 14.2%).Meanwhile, there was observeda deceleration of prices for cabbages (28.4%), carrots (17.7%), lemons (6.5%), apples (5.3%), sugar (5.3%), liquid gas (4.0%), and aircraft transportation (22.2%). 

As aresult the annual inflation (for last 12 months) in October slightly increased to 7.0%, and gradually reachedthe NBT’s medium-term inflation target(see the Diagram).

The contribution of food products in the annual inflation was significant having made 4.7 percentage points (p.p.), whereas non-foodsand services contribution was 1.1p.p.and 1.2 p.p., respectively.

It should be noted that as a result of balancing of supply and demand in the recent months it was observed a stabilization of prices for a number of food products, which earlier due to production cutback and insufficientsupply became the reason of substantial increase in prices.

At the same time the implementation of active antiinflationary monetary policy, stability of domestic foreign exchange market and exchange rate positively influenced this processes.

Going forward, according to analyses and projections it is expected that inflation rate in 2017 and medium term shallvary within the targeted path (7%).

The NBTusing its monetary and exchange rate policy tools primarily the refinancing rate aims to conduct a transparent and prudent monetary policydirected on regulation of liquidity and its priceforelimination of inflationary pressures and consequently on achievement of inflation targeted level.

Press Division of the NBT