Uzbekistan’s inflation remains above target – Central Bank chief explains delay

The timeline for reaching the inflation target has been revised at least six times. The latest forecast anticipates achieving the target by 2027, while the Ministry of Economy and Finance projects an even later date, 2028.

On 11 September in Tashkent, the Central Bank held a press conference with journalists. Chairman Timur Ishmetov addressed questions about why inflation has not reached the 5 percent target and why the goal is continually postponed. He cited several reasons, including monopolies and non-competitive markets.

“Our forecasts are based on internal and external factors. But in practice, if conditions change, forecasts naturally adjust. The government continues structural reforms in various markets, and these efforts affect inflation. Work is underway to reduce the impact of non-monetary factors. For five to six key goods, we are promoting competition, reducing production and import concentration. The effectiveness of these measures will determine the results of our overall monetary policy,” Ishmetov said.

He explained that delays in liberalizing certain goods markets or price adjustments extend the time needed to reach the inflation target.

“External factors and the global geopolitical situation also influence our progress. Forecasting under such conditions is difficult, and there is considerable uncertainty. Nevertheless, we are implementing a flexible policy in coordination with the government,” he added.

At the beginning of 2025, the Central Bank forecast that annual inflation would fall to 7–8 percent by year-end. Ishmetov updated the projection, noting that inflation is expected to reach 8.7 percent by the end of the year.

“Inflation has begun to decline across multiple sectors, but the decrease is slower than anticipated. The rate has fallen less than projected – a positive trend, but insufficient. We expect to reach the target by the end of 2027. If this year’s rate is 8.7 percent, that is understandable. Achieving 5 percent within a single year is not feasible. We will announce detailed expectations in the October forecast,” the central bank head said.

He also noted that the Central Bank closely coordinates with the Ministry of Economy and Finance, sharing data to monitor how budget deficits and expenditures may affect inflation.