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03 April 2019

ADB forecast on the economic situation in Uzbekistan

The Asian Development Bank presented a forecast on the economic situation in Uzbekistan for the next two years.

ADB forecasts GDP growth in Uzbekistan in 2019 by 5.2 and 5.5% in 2020. Inflation rose from 13.7% in 2017 to 17.9% in 2018, despite the exchange rate stability, tight monetary policy and the abolition of customs duties on the import of basic foodstuffs. But the rise in inflation is due to currency liberalization, along with rising utility prices, liberalization of bread prices, rising wages and pensions, and rapid lending. But besides, it is worth noting that the calculation of inflation by the Ministry of Finance has changed and began to coincide with the world practice of counting. What affected the accuracy of the information provided.

“The government is on its way to achieving its goal of transforming the country into a developed market economy. Full-scale reforms will create a favorable climate for business development in the country, reduce inequality, increase productivity and achieve long-term sustainable growth, ”said Sindi Malvicini, Director of the ADB Permanent Mission in Uzbekistan.

ADB predicts a decline in inflation in 2019 to 16% and a subsequent year to 14%, as credit growth within government programs slows down, and further optimization of customs procedures will facilitate imports.

As for the balance of payments of Uzbekistan, the deficit is expected to remain high, at 7% of GDP in 2019, and slightly reduced to 6.5% in 2020.

Export of goods is expected to increase by 10% in 2019 and by 12% in 2020, the increase is due to rising prices for gold, stable demand for natural gas from China, increasing exports of agricultural products to Russia and neighboring countries, and further processing of cotton domestically. with the subsequent production of finished textile products.

Growth in imports of goods in 2019 is projected at 25% and in 2020 at 20%, as the demand for infrastructure projects and the continued modernization of the industry will increase imports for these sectors.