According to the World Bank forecasts, Uzbekistan’s GDP growth will recover to 4.8% in 2021. This is stated in the next issue of the”Review of the Economy of the Europe and Central Asia Region (ECA)”.
However, analysts note that the growth rate may be affected by uncertainty related to the pace of the global economic recovery and the success of the national vaccination campaign against COVID-19.
The gradual recovery of trade and investment flows, the volume of remittances of migrant workers, a rich crop harvest and vaccination of the population will contribute to the economic recovery and encourage further reduction of unemployment and poverty.
In 2022, higher GDP growth is projected (up to 5.5%) as the rate of vaccination accelerates and the disruptions in the global economy ease.
The current account deficit is projected to widen to 5.5% of GDP in 2021 as imports of machinery, equipment and other industrial goods recover under major investment projects.
Despite forecasts of a partial recovery in foreign direct investment after its decline in 2020, public and private borrowing is expected to continue to finance most of the current account deficit.
According to forecasts, the reduction in state budget revenues, the purchase of vaccines, the expansion of social support for the population and the increase in funding for socio-economic development programs and state lending to enterprises will increase the budget deficit to 5.4% of GDP in 2021. It will be financed mainly by increasing government borrowing.
Uzbekistan’s public debt is expected to reach 42% of GDP in 2021 and stabilize at around 45% of GDP in the medium term. As conditions for households and businesses improve, the gradual elimination of anti-crisis measures will lead to a reduction in the state budget deficit in the medium term.