Uzbekistan’s real GDP is projected to grow by 5.5-6.0% in 2025, 5.5-6.5% in 2026, and 6.0-6.5% in 2027, according to the newly approved “Monetary Policy Guidelines for the period of 2025 and 2026-2027” by the Central Bank of Uzbekistan.
The guidelines, conceptually approved during a Board meeting on October 31, 2024, outline the Central Bank's vision for medium-term macroeconomic development and detail monetary policy measures aimed at achieving price stability.
These guidelines were developed based on both baseline and alternative scenarios of macroeconomic development, taking into account the medium-term perspectives of internal and external economic conditions. They also assess the potential impacts of uncertainties and inflationary risks. A notable component is the inclusion of a risky scenario addressing persistent inflationary pressures.
The baseline scenario assumes continued stability in domestic and international conditions, along with a decline in global inflation and stable worldwide economic growth. Under this scenario, consumer demand is expected to moderate in 2025 due to tighter monetary conditions, leading to a projected inflation rate of 6.0-7.0%.
Furthermore, the Central Bank aims to achieve its 5% inflation target in the second half of 2026, supported by expected increases in regulated prices and low base effects from food inflation in 2024.
Conversely, the alternative scenario anticipates stable domestic conditions while recognizing potential negative consequences from rising external risks, such as sustained high global inflation and decreased economic activity in major economies.
Under this scenario, economic growth is expected to range from 5.0-5.5% in 2025, 5.0-6.0% in 2026, and may recover to 5.5-6.5% in 2027. Inflation is projected to reach 7-8% in 2025 before declining to 6% in 2026, with a target of achieving 5% in the first half of 2027.
The risky scenario identifies supply-side inflationary risks stemming from climate change impacts on regional output, stronger fiscal incentives amid production constraints, and mismatches in energy resource supply and demand.
In this context, inflation could rise to 8-9% in 2025 and 7-8% in 2026, approaching the 5% target by the end of 2027. To address these pressures, the Central Bank plans to tighten monetary conditions and increase the policy rate, while collaborating with the government to mitigate the effects of non-monetary inflation factors.
To ensure price stability and achieve the inflation target of 5%, the Central Bank will enhance its monetary policy measures through several key strategies:
- Improving operational frameworks and interbank money markets for effective policy transmission.
- Expanding short-term forecasting tools and reassessing medium-term forecasting models to better reflect current economic realities.
- Actively implementing coordinated monetary and macroprudential policies to balance lending activities.
- Enhancing transparent communication regarding monetary policy, expanding communication channels, and increasing the availability of statistical data.
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