“Budget deficit significantly exceeded the forecast over the year” - Deputy Finance Minister

In January-September 2019, the budget deficit, instead of the projected 4.5 trillion, amounted to 7.3 trillion soums. 

On October 31, a meeting of the Legislative Chamber of Oliy Majlis took place. The report of the Cabinet of Ministers on implementation of the State Program on realization of the Actions Strategy on five priority areas of development of Uzbekistan in 2017-2021, in the third quarter, was heard at it.

Deputy Kodir Jurayev, drew attention to the fact that for 9 months of the year, the deficit of the state budget amounted to 7.3 trillion soums.

According to him, the budget deficit rate approved by the deputies in the amount of 4.5 trillion soums last year was significantly exceeded. The deputy asked members of the government about whether the deficit would increase before the end of this year or if its level is expected to decrease, as well as what impact this will have on prices for goods and services.

“Indeed, this year the budget deficit has grown. Therefore, we have taken a number of measures. To compensate for the deficit by presidential decree, it is allowed to use sources in three areas. The first is through loans. The second - due to the issue of short-term government bonds. Third, at the expense of privatization funds. We used these three tools, so the deficit was reduced. In the third quarter, we also prepared several measures. So, proposals were made to reduce ineffective expenses totaling 1.4 trillion soums. This means that we refused to ministries and departments in the costs of such an amount. Measures to reduce the budget deficit will be taken before the end of the year,” the Deputy Minister of Finance Shohrukh Shorakhmetov said. 

As Shorakhmetov noted, the impact of the state budget deficit on the macroeconomic stability of the country and on pricing policy depends on the numbers. If the deficit grows strongly, this can seriously affect the macroeconomic situation. World practice shows that with a state budget deficit of 3%, the situation can be controlled.

“The budget deficit is a well-known phenomenon and occurs in many countries. Last year, a deficit was also planned, but at the end of the year they went on a surplus. This is due to the fact that a significant part of our revenues comes in the 4th quarter. Therefore, a temporary deficit is possible, but we hope that in the last quarter of the year the main incomes will come and the deficit will be significantly reduced,” Shohrukh Shorakhmedov said.