Despite the global economic downturn caused by the coronavirus pandemic, Uzbekistan will become one of the countries to demonstrate economic growth in 2020, follows from the WB Europe and Central Asia Economic Update.
It is noted that the coronavirus pandemic has become the most serious crisis threatening Uzbekistan since the recovery of the national economy after the collapse of the Soviet Union. It has had a negative impact on the growth of the country’s GDP and has led to a decline in the employment, welfare and income of citizens.
In the first half of 2020, GDP growth was almost zero, compared to 5.8 percent in the first half of 2019. Fixed investment fell by 12.8 percent over the same period. The unemployment rate soared from 9.4 percent in the first quarter to 15 percent in the second quarter.
“The crisis caused by the pandemic almost completely slowed down GDP growth in Uzbekistan in the current year. It increased poverty for the first time in more than two decades. The Government has taken a number of anti-crisis measures to mitigate the impact on the economy, social welfare and health of the population. Despite the current challenges and difficulties, the country’s leadership reaffirmed their commitment to continuing reforms in key sectors of the economy to achieve higher rates of GDP growth and improve the living standards of citizens. After the end of the pandemic, it is extremely important to ensure the recovery of the economy, making it more stable and inclusive,” Marco Mantovanelli, head of the World Bank office in Uzbekistan, said.
Uzbekistan’s economic outlook remains positive, as market reforms increase the incentives in the economy for more efficient use of resources and private sector growth, the WB notes. Easing the lockdown measures in the third quarter of 2020, sustained agricultural production and a partial recovery of remittances will lead to increased economic activity in the second half of 2020.
Annual GDP growth is forecasted to be between 0.4% and 0.8% this year, which is much lower than in 2019 when it reached 5.6%. The pace of the recovery will depend on the duration of the pandemic, access to vaccines, and the rise of international trade and investment flows. Assuming limited further lockdowns, an easing of the pandemic, and a broader global economic recovery, GDP growth is projected between 4.8-5.0 percent in 2021. Inflation will moderate over the medium-term but remain elevated by further price reforms.