According to the IMF in analysis posted on their website, Uzbekistan’s economy has demonstrated remarkable resilience to recent global challenges. Following geopolitical shocks, the economy saw an influx of migrants and a large increase in remittances in 2022, boosting domestic demand. This, coupled with higher external demand, led to real GDP growth of 5.7% in 2022, the head of an International Monetary Fund staff team said in a statement following their visit to Uzbekistan earlier this month.
While remittances have fallen this year to the trend prevailing prior to Russia’s war in Ukraine, a sizable fiscal expansion, and high wage and export growth are expected to sustain real GDP growth at 5.7% in 2023. Strong imports and declining remittances will contribute to a higher external current account deficit this year. International reserves are expected to remain ample at eight-and-a-half months of prospective imports. By the end of 2023, the 12-month inflation rate is projected to decline by more than 3% compared to the same period last year, to 9%, helped by a value-added tax rate cut, and lower international food and energy prices.
The IMF says the outlook for 2024 remains positive, and while risks remain, growth is projected to remain above 5%.
“Preserving macro-financial stability and continuing structural reforms are key to bolstering resilience and sustaining robust economic growth amidst the challenging current global context,” the statement said. Accelerating World Trade Organization negotiations and cooperating with neighboring countries to improve transport routes will reduce transportation costs and open new markets for Uzbekistan’s products, the IMF statement concludes.
