In recent months, the downward trend in headline inflation has slowed and remained broadly unchanged due to the acceleration in food price inflation. At the same time, persistently high consumer activity and expected pro-inflationary risks in external conditions necessitate maintaining tight monetary conditions to bring inflation down to the medium-term target level.
Since the beginning of 2026, some acceleration in inflationary processes has been observed. As a result, core inflation shifted to an upward trajectory, reaching 6.3 percent in February. Meanwhile, due to the diminishing impact of seasonal factors, headline inflation remained broadly unchanged at 7.3 percent.
Inflation expectations continue to remain elevated, in part due to the increase in food prices.
Economic activity remained high, supported by strong aggregate demand. This was reflected in the dynamics of retail and wholesale trade turnover, the number of real estate transactions, and the execution of budget expenditures. These factors support sustained growth rates in industry, services, and construction sectors.
A notable increase in producer prices was observed during this period. Against the backdrop of strong demand, this raises the likelihood that producers will pass on higher costs to final prices, which may be reflected in consumer prices in the coming periods.
Rising geopolitical tensions are also generating upward risks to prices. In particular, disruptions in global supply chains may lead to increases in global prices for energy resources and food products. Changes in logistics channels may also increase transportation costs. This, in turn, may create additional pressure on domestic inflation through import prices.
At the same time, improved expectations regarding the relative stability of key trading partners’ currencies, persistently high gold prices, and continued growth in export revenues and remittance inflows suggest that there are no significant pressures on the real exchange rate of the national currency.
A gradual normalization of lending growth is being observed in the economy. Tight monetary conditions, along with the application of macroprudential measures in the consumer lending segment, will help ensure a balanced aggregate demand and reduce excessive pressure on prices.
Taking into account the above factors, it was deemed necessary to continue tight monetary policy to ensure price stability and reduce inflation expectations.
The Central Bank will continue to closely monitor inflation dynamics, inflation expectations, aggregate demand, and external risks. If the factors noted above materialize and create a risk of delaying the attainment of the inflation target, monetary conditions may be tightened further.
The Central Bank’s monetary policy will remain focused on reducing inflation to the 5 percent medium-term target, ensuring macroeconomic stability, and preserving the purchasing power of the population.
The next meeting of the Central Bank Board to review the policy rate is scheduled for April 29, 2026.
