Gov’t plans to raise salaries, pensions, and benefits above inflation

The government plans to raise public sector salaries, pensions, and allowances above inflation through 2028. The measure is aimed at “improving the population’s standard of living, ensuring real income growth, and strengthening social protection.”

In last year’s fiscal strategy for 2025–2027, the ministry had only committed to index social payments in line with inflation.

The Ministry of Economy and Finance now also intends to tighten eligibility for reduced social tax rates in order to ensure stable revenues for the Pension Fund. For example, until 2028, the service sector enjoys a reduced 1% social tax rate. However, this applies only to employees under 30 whose monthly salary exceeds UZS 3 million.

In 2025, budget transfers to the Pension Fund are expected to surpass UZS 20 trillion. By 2028, they are forecast to reach UZS 26 trillion – nearly double the amount transferred in 2023.

According to the ministry’s infographic, since 2022, wages, pensions, and allowances have been indexed at rates exceeding inflation. As of 1 July, the average increase in social payments was 10%, while inflation for 2025 is projected at around 8%.

Each 1 percentage point increase in public sector wages costs the budget an additional UZS 1.67 trillion. A similar rise in pensions adds UZS 861 billion. If the number of families receiving social assistance grows by 10%, budget expenditures will increase by nearly UZS 1.6 trillion.