The Board of the Central Bank of Uzbekistan decided to keep the policy rate unchanged at 14% per annum at its meeting on September 11, citing persistent inflationary pressures amid robust economic growth.
The regulator noted that strong domestic demand and sustained economic activity continued to push prices upward in the second quarter. However, inflation began to ease in August as the statistical effects of last year's high base subsided.Headline inflation edged down to 8.8% y/y in August, from 8.9% in July. Core inflation, which excludes volatile food and energy prices, slowed to 7.6% due to weaker growth in food and non-food prices. Despite this, inflation in services remained elevated, driven by secondary effects of higher energy costs and resilient demand.
The Central Bank highlighted that households' and businesses' inflation expectations have eased in recent months, supported by seasonal factors and a stable exchange rate. Still, expectations remain above the headline inflation rate.
Uzbekistan's economy grew by 7.2% in the first half of 2025, fueled by rapid expansion in services as well as significant growth in industry, construction, and agriculture. Remittance inflows, accelerated lending, higher budget spending, and active investment contributed to strong aggregate demand.
The Central Bank warned that global factors continue to pose risks. Global inflation is receding more slowly than expected due to trade restrictions and geopolitical shifts. Rising world food prices and above-target inflation in major trading partners may also add to imported inflation pressures.
Inflation in Uzbekistan is projected at around 8.7% by year-end. The Central Bank said that keeping the policy rate at 14% will help balance demand, sustain savings' attractiveness, moderate lending, and stabilize money market conditions.
The regulator is cautioned that while inflation is on a gradual downward path, it will take time for a steady decline to be established. The next policy rate meeting is scheduled for October 23, 2025.
In July 2024, the Central Bank lowered the policy rate to 13.5% — its first drop below 14% in seven years. The rate remained unchanged until March 2025, when it was raised back to 14%, where it remains today.
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