The main driver of this recovery will be strong investment activity, supported by a large-scale government program. Growth rates remain high: from January to May, the country’s GDP increased by 12.2 percent year-on-year due to strong domestic demand. Industry provided additional impetus to the economy (a contribution of 2.86 percent) thanks to the recovery in production of basic metals.

The inflation forecast for the end of 2026 has been revised, increasing by 3.2 percent to 11.5 percent. This figure is the highest rate in several years.

The main drivers of the surge in consumer prices are the conflict in the Middle East, which led to higher logistics and oil prices, and the May increase in electricity tariffs by an average of 11 percent.

The doubling of salaries for medical workers and teachers (requiring approximately 50 billion soms from the budget) and the growth of consumer lending, which jumped 27.1 percent in the first quarter, are also putting pressure on the domestic market.

Analysts expect inflation to slow to 9.2 percent in 2027 and return to the target range (up to 7 percent) only by 2028.

To stabilize the situation, the National Bank, which raised the key rate to 12 percent in February of this year, will keep it at this elevated level, according to the EDB forecast, until 2028.

The withdrawal of excess liquidity and the actual tightening of monetary conditions will occur through pulling interbank rates closer to the key rate. This will anchor economic agents’ inflation expectations in an environment of strong domestic demand and high global commodity prices.

A positive factor is the maintenance of the country’s sovereign credit rating from Fitch at B with a stable outlook due to a budget surplus.

The foreign trade sector continues to experience pressure: in the first quarter of 2026, the value of exports fell by 17.6 percent from the previous year due to reduced supplies of machinery, equipment, and basic metals, while imports decreased by 0.9 percent.

Despite this, analysts predict stability of the national currency. On average, the exchange rate will be 88 soms per dollar this year, 89 soms in 2027, and 90 soms in 2028.

Stability is ensured by large-scale interventions by the regulator: from January to June 2026, net sales of foreign currency exceeded $1 billion. At the same time, due to the accumulation of gold and its high value, international reserves cover seven months of imports.

Double-digit GDP growth (10.2 percent) looks optimistic only on paper, as it is effectively overheated by domestic lending and huge budget injections (50 billion soms for public sector salaries and state investments).

The EDB directly points to a dangerous trend: the real sector and exports are declining (especially the technology sector and metals), while the economy relies on imports and consumption. To keep the som from collapsing amid such a trade imbalance, the National Bank was forced to burn through more than $1 billion in interventions in just six months—more than it would spend in all of 2025.