Why is this important
Support from consumption, investment, and transfers boosts aggregate demand but also raises inflationary risks. Despite steady growth, the Central Bank states that a tight monetary policy will stay in place due to 8.8% inflation and sensitive fuel prices. The ongoing strengthening of the deposit base alongside the growth of private investments suggests a gradual transformation of the financial system.
Key facts
Growth of the economy and investments
- The economy expanded by 7.2% during the first half of 2025.
- Прямые иностранные инвестиции достигли $5,1 млрд (+37% г/г).
- Non-centralised investments increased by 6.6%, while centralised investments declined by 3.7%.
Cross-border transfers
- The volume of transfers in January-August amounted to $12.1 billion, a 23% increase.
- The balance of foreign exchange transactions of the population: +5.6 billion, 1.4 times higher than a year earlier.
Inflation and rate
- Total inflation in August stood at 8.8%, with core inflation at 7.6%.
- The Central Bank’s main interest rate stays at 14% per year.
Banking sector
- Loans were issued for 249 trillion soums (+40% per year).
- The remaining deposits totalled 262.6 trillion soums (+34%).
- Term deposits of individuals in national currency: +45%, up to 67 trillion soums.
What they say
- The Central Bank notes the growth of inflationary expectations against the backdrop of AI-80 discontinuation and continued high consumption.
- The rejection of low-octane fuel is a contributing factor to short-term price increases.
- Simultaneously, a stable exchange rate, a rise in transfers, and an increase in deposits offset monetary risks.
Context
Reducing inflation is a key goal of macroeconomics. But in the context of active lending and increased transfers, additional instruments are required to sterilize excess liquidity. Supporting international reserves, currency stability, and inflation targeting remains at the center of the Central Bank’s policy. The reorientation of investments from the public sector to the private sector and the growth of FDI is an important shift in the structure of capital investments.
