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:
- Enhancement of competitiveness by strengthening the role of the private sector’s role in the economy
- Promotion of green energy and resource solutions across sectors
- 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: 5.5%
Current EBRD forecast for Uzbekistan's Real GDP Growth in 2020: 5.8%
The economy continued growing steadily in the first three quarters of 2019 at 5.7 per cent year on year on the back of strong performance in industry and construction. Exports increased by 45 per cent year on year in US dollar terms in the first eight months of 2019, and imports by 33 per cent, reflecting trade liberalisation policies. Credit expansion remains high at 60.4 per cent year on year in August 2019, supporting the growth of infrastructure investment and surging imports.
Average inflation decelerated to 14.1 per cent in the first three quarters months of 2019 from 18.2 per cent during the same period in 2018. This stems mostly from slower growth in food prices, which has compensated for an increase in services inflation. The central bank has kept the policy rate unchanged at 16.0 per cent since September 2018. As of August 2019, the monetary authorities removed the five per cent limit on daily exchange rate fluctuations, allowing the rate to be determined by the market.
In addition, the sale of foreign currency by commercial banks is now allowed for purposes other than business or tourist travel, including in cash form, which was not previously possible. This is part of a wider set of measures to further liberalise the foreign exchange market. As a result, the exchange rate depreciated by around 12 per cent relative to the beginning of the year. GDP is expected to grow by 5.5 per cent in 2019 and 5.8 per cent in 2020 due to sustained growth in investment, both domestic and foreign, helped by rapid credit expansion.