Finance Ministry announces economic forecasts for the year end

According to preliminary estimates of the main macroeconomic indicators of Uzbekistan at the end of 2019, it is expected that the GDP growth rate will be 5.5% compared to 5.1% last year (with a nominal GDP of 524 trillion soums, or $58.3 billion), the Finance Ministry of the republic reported. 

The ministry notes that the growth is due to internal factors, namely, a strong growth in domestic demand.

This year, domestic demand growth is supported by capital investments in the economy, which are projected to increase by 28.6%. Thus, centralized state investments will amount to 52.3 trillion soums, which is 23% more than in 2018. At the same time, the inflow of foreign direct investment will reach $2-2.5 billion.

Growth was also supported by expansionary fiscal policies with a consolidated budget deficit of 1.3% of GDP (in 2018, a surplus of 0.5% of GDP). In addition, the Ministry of Finance points to an increase in real household incomes (projected growth for 2019 – 8%) as a result of a significant increase in wages in the public sector, a reduction in the tax burden on individuals’ incomes up to 12% and adjustments to total wages in the economy.

At the same time, external conditions are expected to remain weak due to the slowdown in economic growth in some major trading partners, as well as due to lower world prices for some export goods.

On the supply side, growth will be supported by a significant increase in production in the construction sector (annual growth rate of 11.8%), industry (6.4%), services (6.1%) and agriculture (3.0%).

The annual inflation rate at the end of the period is projected at 15.5% (14.3% in 2018). Starting from 2020, in order to curb inflation, measures will be taken to maintain lending growth at a level not exceeding the nominal GDP growth rate.

According to the results of the year, foreign trade turnover is projected at $41.5 billion with an increase of 24.1% ($33.4 billion in 2018) - export $18 billion (+ 28.7%) and import - $23.5 billion (+20.9%).

Gold and foreign exchange reserves are projected to reach $27.7 billion ($26.4 billion in 2018). External public debt is expected to be in the range of $15 billion or 25.8% of GDP ($9.8 billion, or 19.8% of GDP in 2018).