Central Bank of Uzbekistan Presents Examples of Goods Price Reduction, Noting Slowdown in Price Growth
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Central Bank of Uzbekistan Presents Examples of Goods Price Reduction, Noting Slowdown in Price Growth

Deputy Chairman of the Central Bank Nodirbek Achilov stated that price growth rates are slowing down for most goods and services included in the consumer basket of Uzbekistan. These comments were made on November 4 at a press conference dedicated to determining the key rate and monetary policy for the period 2027–2029.

Responding to a question from a journalist of the newspaper 'Uzbekiston Ovoz', Achilov refuted the idea that prices in the country almost never decrease after an increase. He specified that the situation varies depending on the specific good or service, but overall, a slowdown in inflation is noted across most items in the consumer basket.

Achilov analyzed the consumer basket, which comprises 517 items, 40% of which are services. He cited the exchange rate as an example, noting that two years ago, no one expected the dollar exchange rate to drop to 11,900 soms, whereas previously it reached 12,700–12,800 soms.

Furthermore, he reported that the share of items with accelerated price growth has decreased from approximately 45% in June 2025 to 22–25% currently, while price growth has slowed for the remaining 70–75% of goods.

Examples of Price Reductions for Vegetable Oil, Clothing, and Taxi Services

As an illustration of the actual cost reduction, Achilov cited vegetable oil. He noted that after the pandemic, the price of this product reached 30–35 thousand soms per liter, but now oils are available on the market at prices of 18, 19, and 22 thousand soms, confirming the observed decline.

The Deputy Head of the Central Bank attributes such changes to the development of competition and the openness of the economy. He explained that if the cost of a product rises, but import conditions are favorable and customs tariffs are minimal, entrepreneurs can increase supplies from other countries, leading to lower prices under competitive conditions.

Similar processes, in his opinion, are occurring in the clothing market and other non-food products due to increased rivalry between local producers and importers. Regarding the taxi market, the emergence of new aggregators sometimes forced major players to revise their tariffs downwards.

Reasons for Further Food Price Increases

Despite the general trend of slowing inflation, Achilov admitted that the situation with staple food products remains challenging. In some food categories, price growth reaches 8–10%, particularly because the expansion of livestock farming cannot be ensured quickly, which affects meat supply.

The Deputy Head of the Central Bank recalled government measures to support food supplies, including providing loans and benefits, as well as compensating for transport costs when importing meat. He also noted positive dynamics in poultry farming, which helps stabilize chicken prices.

Achilov emphasized that consumer price dynamics are influenced not only by monetary conditions but also by the level of market development and the business's ability to promptly increase supply. He concluded that the slowdown in price growth by approximately 70% in the consumer basket indicates positive trends in the structure of inflation.

According to the Central Bank, annual inflation in September 2026 was 6.4%, higher than the August figures (6.2%) and last year's September (8%). Food inflation in September was 6.3%, non-food inflation was 5.8%, and services inflation was 7%, while core inflation remained at 5.5%.

At the press conference on November 4, Achilov explained the September inflation spike as being due to seasonal price increases for fruits and vegetables, as well as rising fuel and certain service prices. On the same day, the Central Bank board decided to keep the key rate at 14% per annum, driven by persistently high domestic demand and inflationary risks. According to the Central Bank's baseline scenario, overall inflation should approach the target level of 5% in the second half of 2027 and remain around that mark in 2028–2029.

Price Dynamics for Various Goods and Services

According to data from the National Committee on Statistics, the most noticeable price decreases over the last month were recorded for lemons and oranges (a decrease of 12.1%), mandarins (11.9%), grapes (5.6%), zucchini (3.7%), as well as theater services (2.9%), apples (2.4%), bananas (1.7%), sugar (1%), and cement (0.9%).

In contrast, the largest price increases were shown by fresh tomatoes (an increase of 14.2%), cucumbers (13.5%), and carrots (12.4%). The cost of state preschool education services (up by 6.8%), legal services (6.6%), contract education in universities (6.3%), potatoes (5.5%), and eggs (5.3%) also rose. Propane for cars and AI-95 gasoline showed an increase of 4.2% each.

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Central Bank of Uzbekistan reports weakening influence of the US dollar on inflation expectations
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Central Bank of Uzbekistan reports weakening influence of the US dollar on inflation expectations

The Central Bank of Uzbekistan stated that households and businesses are gradually abandoning the assumption that the annual exchange rate growth of the US dollar needs to be at the level of 5–10%.

Deputy Chairman of the Central Bank Nodirbek Achilov announced at a press conference on November 4 that changes in the foreign exchange market are reducing the impact of the exchange rate on inflation forecasts. According to Achilov, previously the exchange rate was the main factor shaping the expectations of the population and businesses regarding future price growth for a long time.

He noted that until 2025, the exchange rate predominantly showed an upward trend, and currency movements accounted for almost 60% of inflation expectations. However, the situation began to change in 2025 due to increased supply of foreign currency and bilateral exchange rate fluctuations, which reduced the significance of this factor for inflation forecasts.

The change in the structure of expectations is taken into account when compiling macroeconomic forecasts and making decisions on the key rate. According to a Central Bank survey, household inflation expectations for the next 12 months decreased to 8.7% in September 2026 compared to 9.8% in August, and in December 2025 they were 11.5%. Business expectations also decreased to 9.2%, which is lower than the figure of 9.6% a month earlier and 11.1% in December of last year.

In September, 22% of surveyed households named exchange rate movement as a possible reason for price increases, which is higher than 14% in August. Nevertheless, this factor was mentioned less often than others. The most frequent reasons for price increases for households were higher fuel and energy prices (mentioned by 50% of respondents versus 52% in August) and rising utility tariffs (38% versus 53% in August).

Other factors mentioned by households included higher prices for basic food products (31%), monopolistic practices and artificial price increases (30%), wage and pension growth (29%), and increased transport costs (26%). Businesses most often cited higher fuel and energy costs (52%) and utilities (38%). At the same time, the share of businesses expecting price pressure due to rising raw material and supply costs increased from 19% to 37% in a month, and the share citing high tax burden increased from 15% to 29%.

Since 2025, the Central Bank has also been conducting separate surveys of financial experts, forming a third group alongside households and businesses. Achilov noted that the inflation expectations of financial experts are about 6.3%, meaning they expect significantly lower inflation over the year compared to households and businesses.

Annual inflation in September was 6.4%, including 7% for services, 6.3% for food, and 5.8% for non-food items. Key rate decisions affect the economy with a delay of up to 16–18 months, so the regulator considers not only current inflation but also inflation expectations. The Deputy Chairman stated that the decrease in inflation expectations to 8.7% was one of the reasons for considering a reduction of the key rate to 13.5% on that day.

If the downward trend continues across all three groups, a renewed discussion on easing monetary policy may occur at upcoming Council meetings. Nevertheless, on November 4, the Central Bank left the key rate unchanged at 14% per annum, citing strong domestic demand and inflationary risks. The regulator reported that the rate could fall to a single-digit level during 2027–2029 if inflation sustainably slows down to 5%.

The sum currency has strengthened against the US dollar since the beginning of 2025, showing an increase of almost 7% in 2025 and another 1.9% in the first nine months of 2026. However, the trade balance deficit remains high. At the end of August, Central Bank Chairman Timur Ishmetov stated that the regulator would support a floating exchange rate and would not manage it through administrative measures.

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