Uzbekistan Central Bank Holds Key Interest Rate at 14% Amid Strong Q1 Economic Growth
The board of the Central Bank of Uzbekistan (CBU) resolved to maintain its primary interest rate at 14% per annum following a meeting on April 29. The official announcement detailing the decision was published on the organisation’s website.
According to the regulator, annual inflation dropped to 7.1% in March, aligning comfortably with previous forecasts. Meanwhile, core inflation was evaluated at 5.7%.
Despite these promising figures, the CBU noted that some underlying pressures remain.
«Despite the continued decline in inflation expectations in March, they are forming above the inflation forecasts,» the bank stated.
Revised projections now anticipate that inflation within the republic will settle at approximately 6.5% by the end of the current year.
First quarter economic highlights
On a broader macroeconomic scale, Uzbekistan experienced robust growth during the first quarter of the year. Key drivers of this positive momentum include:
- Surging GDP: The nation’s gross domestic product expanded by 8.7% between January and March.
- Sector Growth: This economic boom was primarily fuelled by strong performances across the services, construction and trade sectors.
Looking ahead, the central bank has upgraded its economic growth forecast for the year to between 7% and 7.5%. This optimistic outlook is heavily underpinned by an anticipated influx of capital including foreign direct investment.
However, the regulator remains cautious and stressed its readiness to act should economic conditions deviate from expectations. The CBU confirmed it is fully prepared to tighten its monetary policy further if necessary to achieve its ultimate target inflation rate of 5%.
