Uzbekistan's Central Bank considers lowering inflation target after decades of high rates

Speaking at a media dialogue on November 26, Zokirov outlined the potential for revising the inflation target, contingent upon achieving the current goal of 5% sustainably, Spot reported.

"We have lived with high inflation for 30 years," Zakirov remarked, emphasizing the historical challenge faced by the country. He highlighted that persistent high inflation disproportionately affects low-income populations, who lack savings and rely on wages paid in the national currency.

The Central Bank’s optimistic scenario projects reaching the 5% inflation target by the second half of 2026. In less favorable scenarios, this milestone may be achieved in 2027. The current inflation target aligns with benchmarks set by Uzbekistan’s key trading partners: Russia, with a target of 4%, and Turkey and Kazakhstan, both targeting 5%.

Addressing questions about repeated delays in achieving the 5% target, Zakirov attributed the postponements to external shocks such as the COVID-19 pandemic, global economic recovery efforts, and the war in Ukraine. These factors have significantly impacted economic stability and prolonged the timeline for reducing inflation.

As of October, Uzbekistan’s annual inflation rate stood at 10.24%, showing a slight deceleration compared to September. Excluding the effects of recent increases in electricity and natural gas tariffs, inflation was estimated at 6.6% to 6.7%. By year-end, the Central Bank anticipates inflation to settle at approximately 9.5%.