Uzbekistan overview


A new approach by the Uzbekistan authorities has allowed the EBRD to re-engage in the country, open a new Resident Office in Tashkent and prepare a new Country Strategy adopted by the Board of Directors in September 2018.

The document identifies the following operational and strategic priorities for the EBRD’s work in Uzbekistan:

  1. Enhancement of competitiveness by strengthening the role of the private sector’s role in the economy
  2. Promotion of green energy and resource solutions across sectors
  3. Support increased regional and international cooperation and integration.

The Bank’s new phase of engagement with the country was prompted by a major reform programme launched by the authorities in February 2017 moving towards a more open, integrated market economic model, improving international relations, strengthening the rule of law and judicial independence and achieving the liberalisation of the foreign exchange rate. Reducing the state’s presence in the economy, improving the business environment and facilitation of foreign direct investments are among the top priorities of the Uzbek authorities.

The new EBRD strategy for Uzbekistan recognises the need to strengthen the country’s democratic institutions, expand the role of civil society, provide greater freedom to mass media and promote women’s entrepreneurship. The Bank will also continue monitoring progress on the eradication of forced and child labour in sectors such as the cotton growing industry.

The EBRD's latest Uzbekistan strategy was adopted on 19 September 2018.

Current EBRD forecast for Uzbekistan's Real GDP Growth in 2019: 5.0%

Current EBRD forecast for Uzbekistan's Real GDP Growth in 2020: 5.2%

The economy expanded by 5.1 per cent in 2018, up from a revised 4.5 per cent a year earlier, and enabled mainly by high fixed investment growth. On the supply side, industry and construction were the primary drivers of growth. At the same time, Uzbekistan’s external position moved into deficit as imports grew 40 per cent in US dollar terms in 2018, strongly exceeding exports growth of 14 per cent. The current account turned into a deficit of around 7 per cent of GDP in 2018 from a surplus in 2017 as a result. After a major devaluation in 2017, the exchange rate weakened further by 2.6 per cent in 2018.
 
Price liberalisation and the resulting adjustment of relative prices, and rapidly increasing credit and money supply, pushed average annual inflation to 17.9 per cent in 2018 from 12.5 per cent in 2017. To contain inflation, the central bank raised the policy rate from 14.0 to 16.0 per cent in September 2018. The augmented fiscal deficit (taking into account lending by the Uzbek Fund for Reconstruction and Development) increased to 2.5 per cent of GDP in 2018 from 2.1 per cent in 2017, reflecting higher public outlays on social programmes and infrastructure.
 
The economy is predicted to grow by 5.0 per cent in 2019 and 5.2 per cent in 2020, driven by further expansion of fixed investment, including FDI. Wage increases and remittances should also support private consumption growth.