The impact of inflationary processes on the development of foreign trade of the Republic of Uzbekistan

Abstract

The article examines the impact of inflationary processes on the development of foreign trade in the Republic of Uzbekistan over 2016 - 2025. Using official data of the National Statistics Committee and the Central Bank (n=10), three econometric models are estimated: log-linear export and import equations with a trend, and a first-difference model of the export-to-import coverage ratio. Inflation is found to have no statistically significant effect on nominal export and import volumes, yet it significantly worsens trade balance: a one percentage point increase in the previous year's inflation reduces the coverage ratio by 1.49 pp (R²=0.503; F=7.10; p=0.032). A critical inflation threshold of 10.3 % is identified. Scenario projections show that reaching the Central Bank's 5 % target would raise the coverage ratio to 90 % by 2028, against 75 % under an inertial scenario.