Uzbekistan’s GDP to grow at 5pct
By Kamila Aliyeva
The International Monetary Fund (IMF) predicts that during 2018-2019, Uzbekistan’s GDP will continue to expand steadily at about 5 percent, supported by favorable external demand and commodity prices, a pickup in agriculture due to reform measures and the expected normalization of harvests, and a humming construction sector building houses and public infrastructure.
This was stated in the concluding statement which followed the visit of the IMF delegation headed by Albert Eger to Uzbekistan.
The IMF mission in its statement emphasizes that there are cardinal changes in all spheres in Uzbekistan which are recognized by external observers.
The representatives of the fund note the high appreciation given by the international community to the determination of the republic's leadership in carrying out key reforms to liberalize the economy.
“Uzbekistan has embarked—with great determination—on reforms to address the country’s most pressing challenges, foremost the lack of jobs,” the statement said.
This, according to the organization, opens up a unique opportunity, conditioned by demographic factors, for Uzbekistan to realize its aspirations and in the medium term to achieve the status of a country with an income level above the average.
“In September 2017, the authorities liberalized the foreign exchange market, and the official exchange rate depreciated by 50 percent. A first wave of transition reforms followed this first courageous step, including initiating price liberalization, reforming state-owned enterprises (SOEs), granting the Central Bank of Uzbekistan (CBU) more independence, and improving statistics,” according to the IMF.
The IMF mission also welcomed the measures taken to liberalize and phase out regulated prices, especially the increase in procurement prices for grains and raw cotton, which are important steps in eliminating price distortions in the economy, creating effective market incentives, and ensuring financial independence of enterprises and farms.
“Inflation is projected to remain elevated, which is normal during the early phase of liberalizing a distorted economy,” the statement said.
Fund experts emphasized that despite inflation growth caused by the introduction of market pricing for goods and services, in the medium and long term, price adjustment is one of the most important factors without which it is difficult to achieve sustainable economic development and reduce inefficient indirect subsidies.
“In fact, high inflation is typical for countries during the early transition reforms. Thus, notwithstanding the assumption of tighter fiscal, credit, and monetary policies during 2018-19, inflation is expected to decline only gradually over the next two years,” according to the statement.
The mission stressed that Uzbekistan, which is actively pursuing reforms, could also become a catalyst for change and prosperity in the region. Given the large population and geographical location, Uzbekistan throughout history has been the economic core of Central Asia.
Steady course of reforms, according to the IMF, will promote the growth of inter-regional trade, the creation of regional supply chains, as well as the restoration of interconnected regional energy and transport networks.
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Kamila Aliyeva is AzerNews’ staff journalist, follow her on Twitter: @Kami_Aliyeva
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