Economic activity continued to grow in the third quarter as well. The maintenance of relatively tight monetary conditions, the fading impact of last year’s inflationary factors, and the stabilizing effect of the exchange rate appreciation on goods prices contributed to a slowdown in annual inflation in September.
At the same time, inflationary risks arising from external supply shocks as well as high services inflation persist amid strong aggregate demand. Taking these factors into account, the Board of the Central Bank decided to maintain the policy rate at 14 percent per annum.
In September 2025, the headline inflation rate decreased by 0.8 percentage points, reaching 8 percent year-on-year. Inflation in the food and non-food components slowed to 6,1, contributing to the overall decline. Meanwhile, inflation in services, including services inflation without regulated prices, remained above headline inflation as a result of demand-side factors.
Some moderation in demand factors due to tight monetary conditions, combined with the appreciation of the exchange rate, helped to bring core inflation to a downward trend. In September, annual core inflation slowed to 7 percent. The appreciation of the soum is contributing to the slowdown of import inflation, stabilizing the prices of non-food goods to some extent.
In recent months, the share of goods and services in the consumer basket whose prices have risen more slowly compared to the same period last year has been increasing, indicating that price stabilization has begun to take on a broader and more widespread character.
In September, inflation expectations of households and business entities continued to decline, but they remain at a level higher than the current and forecasted inflation rates.
Taking the above factors into account, the inflation forecast for the end of this year has been revised downward and is expected to form around 8 percent.
The strong economic growth and investment activity observed in the third quarter of this year are expected to continue in the next quarter, with real GDP growth forecasted to be around 7–7.5 percent by the end of the year.
The increase in household real incomes and the expansion of retail lending activity are supporting purchasing power and boosting consumer demand. This, in turn, may contribute to the persistence of inflationary pressures in the economy in the future.
Meanwhile, the risk associated with the pass-through effects of energy tariff liberalization on inflation in the coming months as well as supply-related issues for certain goods remain.
Under these conditions, ensuring the continued downward trend of inflation requires maintaining monetary conditions at their current relatively tight level.
Relatively tight monetary conditions will help balance aggregate demand by preserving the attractiveness of savings in the economy, moderating the pace of lending, and ensuring proportionate pricing of resources in the money market, thereby reducing the impact of monetary factors on inflation.
Taking the above factors into account, the Board of the Central Bank decided to keep the key policy rate unchanged at 14 percent per annum.
The Central Bank will ensure that monetary conditions remain sufficiently tight to achieve a decline in inflation toward the 5 percent target in the medium term.
The next meeting of the Central Bank’s Board to review the policy rate is scheduled for December 11, 2025.
