Central Bank of Uzbekistan aims to achieve 5% inflation target by 2027

Tashkent, Uzbekistan (UzDaily.com) — The Central Bank of Uzbekistan intends to reach its established inflation target of 5% by the end of 2027, despite multiple delays in the timeline, Central Bank Chairman Timur Ishmetov said at a press conference on 11 September.

He noted that ensuring price stability is a key mandate of the regulator, which is why the 5% inflation target was set. However, the timeline for achieving it has been revised several times. According to the updated fiscal strategy of the Ministry of Economy and Finance, this benchmark may now only be reached by 2028.

Journalists raised concerns about whether repeated delays could undermine business and public confidence in the Central Bank’s monetary policy discipline and its commitment to the target. They pointed out that the bank has maintained a relatively accommodative policy, avoiding interest rate hikes to prevent higher borrowing costs, while inflationary pressures can also be influenced by government decisions, such as raising tariffs, maintaining energy subsidies, or imposing import restrictions.

Responding to these questions, Ishmetov acknowledged that achieving the target has indeed been postponed multiple times due to both external and internal factors. According to updated forecasts, inflation for 2025 is expected to reach 8.7%, exceeding early-year projections.

“We are seeing some positive signals: inflation is beginning to slow, but the process is proceeding more slowly than we had anticipated. This is why the key rate has been maintained at its current level. There are no grounds for raising it yet, but conditions for a reduction are also not present,” the Central Bank head explained.

He noted that reducing inflation from 8.7% in 2025 to 5% by the end of 2026 is unlikely. “Our target remains the end of 2027. For now, this is the timeline we are relying on,” Ishmetov said, adding that updated macroeconomic forecasts will be presented in October.

The regulator’s calculations take into account not only domestic developments but also the international economic environment, with forecasts adjusted as external conditions change.

Commenting on the influence of government decisions, such as tariff policies or the continuation of subsidies, Ishmetov emphasized that the Central Bank assumes ongoing structural reforms. “If liberalization of commodity markets is delayed, this temporarily restrains price growth, but in the future it increases inflationary pressure, extending the timeframe to reach the target,” he explained.

Ishmetov also highlighted the persistent uncertainty in the external environment, which complicates forecasting, but assured that the regulator, in coordination with the government, is ready to implement flexible policies.

He noted that, alongside monetary measures, efforts are being made on non-monetary factors, primarily strengthening competition and reducing production concentration in certain commodity sectors. “The effectiveness of these steps will directly determine the overall success of our policy,” the Central Bank chairman concluded.