Heating tariffs turned out to be higher than the Central Bank's expectations

**Heating Tariffs Exceed Central Bank's Expectations**

The Central Bank of Uzbekistan has adjusted its inflation forecast for the end of 2026 from 6.5% to 7%, partly against the background of the expected increase in heating and hot water tariffs. Samigjon Inogamov, Director of the CBU's Monetary Policy Department, announced this on November 4.

At a press conference, a journalist from Vaqt.uz asked whether the Central Bank takes into account in its forecasts the planned 30% increase in heating tariffs, as well as the potential impact of this step on the population's inflation expectations.

Nodirbek Achilov, Deputy Chairman of the CBU, replied that the regulator had already incorporated all announced changes in regulated prices into its calculations, including heating tariffs.

"As in the case of liquefied gas, we accounted for the one-off impact of the heating tariff increase in the current forecast. The forecasts for next year also take into account all changes announced to date. The 7% inflation forecast already includes all these factors," he stated.

Samigjon Inogamov clarified that the increase in hot water and heating tariffs was also provided for in the initial inflation forecast of 6.5%.

"However, the announced parameters turned out to be somewhat higher than [initial expectations]. Therefore, we took them into account in the updated forecast, revising the year-end inflation estimate from 6.5% to 7%," the department director explained.

According to him, the tariff revision became one of the important factors influencing the decision of the Central Bank's Board to maintain tight monetary conditions and the key rate at 14%.

Responding to another question from journalists, Nodirbek Achilov said that on November 4, the Central Bank's Board did not discuss the possibility of raising the key rate due to the growth of regulated tariffs.

"According to our calculations, the primary impact of the tariff changes will be short-term and relatively small. Therefore, the issue of raising the key rate was not discussed by the Board today," the CBU deputy head noted.

He added that two options were considered at the meeting: leaving the rate at 14% or reducing it to 13.5%.

Achilov explained that when making the decision, the regulator took into account not only the direct price increase of individual services, but also the risk of this growth spreading to other goods and services.

"We consider it appropriate to continue a tight monetary policy in order to mitigate the secondary effects of tariff changes," he stated.

The CBU deputy head emphasized that the regulator assesses the direct impact of tariff changes as predominantly one-off. At the same time, maintaining tight monetary conditions should limit their impact on inflation expectations and sustainable components of inflation.

Achilov also noted that the government has provided for social support measures for the population, which are expected to help mitigate the impact of tariff increases on household incomes and purchasing power.

It worth recalling that in October, the Ministry of Construction and Housing and Communal Services submitted a draft government decree for discussion, providing for an increase in tariffs for centralized heating and hot water supply.

In Tashkent, for consumers of Veolia Energy Tashkent, it was proposed to raise the cost of heating by about 30% — from 241.44 to 314 soums per 1 sq. m of heated area per day.

The hot water tariff with a meter was also planned to be increased by 30% — from 8,928.67 to 11,607 soums per cubic meter. At the same time, according to the draft, the fee for hot water without a meter could decrease from 52,303 to 45,330 soums per person per month due to changes in the calculation procedure.

The draft provided for the introduction of new tariffs from November 1, but they have not yet been approved.

Earlier, the Central Bank forecasted inflation at the end of 2026 at 6.5%. In September, annual inflation stood at 6.4%, accelerating after 6.2% in August. The Central Bank's goal is to achieve a sustainable reduction in inflation to 5% in the second half of 2027 and maintain it near this level in subsequent years.