HEADLINE VERSUS FELT INFLATION: DISTRIBUTIONAL IMPLICATIONS OF INFLATION TARGETING IN UZBEKISTAN

Bazarov , Murodullo

Рақамли иқтисодиёт ва ахборот технологиялари · 2026-yil

Annotatsiya

Since the Central Bank of Uzbekistan (CBU) adopted an inflation targeting framework in January 2020, with a permanent 5 percent target, headline consumer price inflation has fallen from approximately 15 percent in 2019 to single digits. Yet the original target date of 2023 has been postponed repeatedly, most recently to the 2027-2028 horizon, and household perceptions of inflation remain elevated. This paper argues that part of the gap between official statistics and household experience reflects a fundamental measurement asymmetry: the aggregate Consumer Price Index is calculated using a representative basket that does not match the basket of low-income households. Building on the heterogeneous inflation literature (Jaravel, 2019, 2021; Kaplan and Schulhofer-Wohl, 2017; Cravino, Lan and Levchenko, 2020), we develop the concept of “felt inflation” - the household-group-specific price index that arises when consumption baskets vary systematically across the income distribution. Using publicly available data from the CBU and the Statistics Agency of the Republic of Uzbekistan, we document that food, which is consistently the most volatile component of the Uzbek CPI, accounts for approximately 69 percent of the official minimum consumption basket, more than twice the food share of the average household. A numerical illustration suggests that the gap between headline inflation and felt inflation for low-income Uzbek households may reach two to three percentage points in periods of elevated food price growth. We discuss implications for CBU communications, monetary-fiscal coordination, and the conduct of inflation targeting in transition economies.

Maqola ma’lumotlari
MualliflarBazarov , Murodullo
JurnalРақамли иқтисодиёт ва ахборот технологиялари
Nashr sanasi2026-04-14
Jild6
Son1
Betlar369-380
TilIngliz

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Kalit so‘zlar

inflation targeting; distributional inflation; heterogeneous agents; monetary policy; Uzbekistan; Central Asia; household welfare; plov index

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