GDP growth above expectations allows Uzbekistan to maintain tight monetary policy

After Uzbekistan’s economic growth accelerated to 8.7% in Q1, it cooled slightly over the following three months, with GDP growth slowing to 8.5% in the first half of the year, compared with the same period in 2025. Nevertheless, this year’s growth is still well ahead of last year’s pace: the country’s economy grew 7.2% in the first half of 2025.

At current prices, Uzbekistan’s GDP reached $89 billion in January-June, based on the official exchange rate as of July 1, 2026.

Since December 2025, Uzbekistan’s Central Bank has revised its 2026 economic growth forecast three times. The December baseline scenario projected GDP growth of 5.5%-6.5%. In January 2026, amid continued economic and investment activity, the forecast was raised to 6.5%-7%. In April, when Q1 growth figures became available, the bank raised its outlook to 7%-7.5%. Finally, in July, after first-half results came in, the regulator raised the forecast to 7.5%-8%.

The IMF’s June report described Uzbekistan’s GDP growth as exceptionally strong, while identifying potential overheating and deteriorating global conditions as key downside risks. Overall, the economic outlook was considered favorable. The fund recommended containing demand pressures, safeguarding macro-financial stability and accelerating reforms to strengthen productive capacity and support sustainable, private-sector-led growth.

GDP breakdown

Industry again contributed the most to the pace of Uzbekistan’s economic growth. In H1 2026, it accounted for 2 p.p. of overall economic growth. Gross value added (GVA) generated by industry increased 8% year-on-year. The sector accounted for 26.5% of GDP, excluding net taxes on products. Within the industry, manufacturing emerged as a key driver, with GVA growing 8.8%. Passenger car production rose 11.1%.

GVA in the services sector, the economy’s largest sector at 50.8% of GDP in the reporting period, grew 9.2%.

IT and communication services accounted for 3.3% of total GVA in H1 2026, compared with 3.1% in 2025.

The share of trade in GVA increased from 9.3% to 9.4%. Trade growth in Uzbekistan is 1.8 times as fast as overall economic growth.

Construction posted the fastest GVA growth (+13.7%) among the productive sectors. Construction contributed 1 p.p. to GDP growth. The sector’s share of GDP increased from 7.65% to 7.7% year-on-year.

Agriculture’s share of GDP decreased from 15.3% to 15%. The sector’s GVA grew just 4.7%, while its contribution to GDP growth stood at 0.7 p.p., the lowest among the key sectors, as it was a year ago.

Monetary policy

Annual inflation slowed from 7% in April to 5.5% in May, before picking up again in June to 6.4%, or 6.9% excluding seasonal fruit and vegetable products. In June, food prices rose 6.3% year-on-year, while non-food prices increased 5.9% and services 7.1%.

In the first six months of 2026, inflation stood at 3.3%, or 4.2% excluding fruits and vegetables. Utility services and food products accounted for the largest share of the price increase, at 60.2% of the overall impact, contributing 1.1 p.p. and 0.9 p.p., respectively. Transport was the third-largest contributor at 0.4 p.p., mainly due to an 8.5% increase in fuel and lubricant prices.

The Central Bank believes the key reasons for the acceleration in inflation in June were higher household utility tariffs and the liberalization of coal prices.

In Q2 and Q3, Uzbekistan’s Central Bank held four scheduled monetary policy meetings and kept its policy rate unchanged at 14% throughout. The regulator justified maintaining a tight monetary policy stance to ensure a sustained slowdown in inflation toward the 5% target by the end of 2027. The Central Bank forecasts inflation to stand at 6.5% by the end of 2026.

The Central Bank sees domestic inflationary risks in the ongoing liberalization of regulated prices, which could amplify secondary inflationary effects through production costs and service prices. External risks include high global prices for commodities, food and energy, which keep pressure on local inflation through imports. At the same time, the bank noted several positive trends that could support a lower policy rate in the future, including easing imported inflationary pressures as the sum strengthened against weaker currencies among some key trading partners, stabilization in certain components of aggregate demand and a normalization in the pace of credit growth under the current monetary conditions.

Tashkent International Investment Forum

AI-assisted monitoring of Uzbekistan’s media landscape showed that the 5th Tashkent International Investment Forum (TIIF) emerged as the most widely covered event of Q2 in local media. According to Uzbekistan’s Ministry of Investment, Industry and Trade, 209 foreign journalists from 41 countries worked at the 2026 event, compared with 114 journalists and media experts from 31 countries a year earlier. The number of foreign delegates rose from 2,022 to 3,802.

Following the 2026 TIIF, the signing of 166 investment agreements worth $43.1 billion was announced, compared to $30.5 billion last year. However, the forum press release didn’t list specific project names or the value of the agreements, which may be due to the fact that some projects were not entirely new. For instance, on June 17, on the forum sidelines, an agreement was announced on a public-private partnership to construct and operate a new international airport in Tashkent, whereas the official project start took place in October 2025. However, it was disclosed at the forum that foreign partners will build and manage the passenger terminal and landside infrastructure, while UzAirports will oversee the airfield complex. The first stage is due for completion by the end of 2030. The Transport Ministry said the 35-year concession is expected to attract about $3 billion in foreign investment.

In another development, at the 2026 TIIF, Vietnam’s ROX Group signed a trilateral agreement with the Uzbek Ministry of Investment, Industry and Trade and Khokimiyat (regional administration) of the Bukhara region. In December 2025, the company signed an agreement on the same $2 billion projects; however, the status of cooperation was upgraded from regional to republican intersectoral.

ROX Group is implementing the New Bukhara City and New Central Bukhara projects in Bukhara and preparing the Uchtepa City project, estimated at $1.5 billion, in Tashkent.

A petrochemical project involving Kazakhstan’s KMG PetroChem, a wholly owned subsidiary of KazMunayGas, was also cited in connection with the 2026 TIIF. Yuz.uz reported, without citing sources, that the company plans to invest $780 million in the production of terephthalic acid and polyethylene terephthalate (PET). However, KazMunayGas’ official disclosures present the project differently. Its 2025 annual report mentions a prospective PET plant project but provides neither its location nor capital cost. At the time of the report, KazMunayGas had not identified a strategic partner, and the financing structure and other details were still under discussion. The same report also mentions a framework agreement with Uzbekneftegaz JSC on the possible production of linear alkylbenzene, a project still in the early stages and not yet assigned a cost.

In addition, the news portal UPL.UZ included Kazakhstan’s PTC Holding among the parties to the major agreements reached at the 2026 TIIF, without citing a source. The company was expected to build a $300 million multipurpose logistics center. However, the project dates back to December 2022, when, in the presence of the presidents of Kazakhstan and Uzbekistan, PTC Holding, the Tashkent Region Khokimiyat, Vuono Capital, and Halyk Bank signed a memorandum of cooperation. The project envisaged 37 km of railway tracks, container yards with capacity for more than 11,000 containers and 248,000 square meters of warehouse facilities. The first stage was initially scheduled for completion in 2026.

The project subsequently underwent several changes. In March 2025, state-owned Uzbekistan Railways replaced Vuono Capital as PTC’s partner, and the two parties established the Silkway CA joint venture, with stakes of 51% and 49%, respectively. In November 2025, the parties held a new official construction launch ceremony for the first stage. In March 2026, Silkway CA signed an EPC contract with China Railway Construction Engineering for the first stage of the Multipurpose Modern Logistics Center, with an investment of more than $84 million and completion scheduled for 2027. In July, the same contractor was awarded an EPC contract for the second stage, comprising 60,000 square meters of warehouse facilities, although its investment cost was not disclosed. Thus, while the project predates the 2026 TIIF by several years, it entered another stage of implementation in 2026, with significant changes to its partnership structure and project configuration.

A new rival emerges for the AIFC

Uzbek President Shavkat Mirziyoyev announced the establishment of the Tashkent International Financial Center (TIFC) at the 2026 TIIF on June 17. The idea for the center emerged in 2018 after Mirziyoyev visited Astana and became acquainted with AIFC operations. A decree establishing the TIFC was issued on March 30, 2026, and a Constitutional Law in July formalized its status as a separate territory with a special legal regime.

The TIFC residents are eligible for free movement and repatriation of capital, settlements in any currency, digital asset transactions and simplified visa rules. They are also exempt from several taxes and customs duties until Jan. 1, 2076.

On Sept. 10, Saida Mirziyoyeva was appointed head of the TIFC. In June, she visited the AIFC in Astana to study Kazakhstani expertise, while in September she met with BlackRock management in New York. The company is involved in developing the TIFC concept and structure.

BlackRock was also one of four anchor investors in the IPO of Uzbekistan’s National Investment Fund (UzNIF). The fund’s dual listing took place in May 2026 on the London and Tashkent stock exchanges. The LSE offering raised $604 million, including a $100 million investment by BlackRock.

The TIFC is scheduled to begin operations in early 2027.

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