Government to raise wages, pensions, and benefits in line with inflation for 2025
The government of Uzbekistan is set to increase the salaries of public sector employees, along with pensions and welfare benefits, at a rate no lower than the projected 7% inflation for 2025. This plan is outlined in the Ministry of Economy and Finance’s draft budget framework for 2025-2027, which emphasizes measures to protect household incomes from inflationary pressures.
The Ministry has provided insights into the fiscal requirements for these increases, noting that each 1% increase in wages will cost the budget 1.5 trillion UZS annually, a rise from the 1.3 trillion UZS in 2024. For pensions, a 1% hike will require 730 billion UZS, up from 600 billion UZS last year. With a projected 10% increase in the number of welfare recipients, the budget will need an additional 740 billion UZS to cover the expansion.
The draft budget also anticipates that wage-related expenses, including social taxes, will account for up to 9.5% of the GDP and nearly 44.8% of overall government expenditures. The total allocation for wages is expected to rise by 21.8%, from the initially planned 126.7 trillion UZS to 154.3 trillion UZS.
Economist Otabek Bakirov predicts that the wage increases may take effect in the first half of 2025 rather than the fourth quarter, as was the case in 2024.
The number of pension recipients is expected to grow from 4.1 million to 4.3 million, with related expenses increasing by 17% from 64.1 trillion UZS to 75 trillion UZS. The average pension is projected to increase by 11.7%, from 1.299 million to 1.45 million UZS.
One notable exception is scholarships, which will not see an increase in 2025 for the fourth consecutive year. However, the total budget allocation for scholarships is set to rise slightly, by 5.3%, from 1.9 trillion UZS to 2 trillion UZS, mainly due to an increase in the student population.
In 2024, the budget initially allocated 9.55 trillion UZS for salary, pension, benefit, and scholarship adjustments. However, actual expenditures fell short of this target, totaling 7.1 trillion UZS due to adjustments in wage and pension hikes throughout the year.
Looking ahead, 6.63 trillion UZS is earmarked for the planned wage, pension, and benefit increases in 2025.
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