Uzbekistan announces initial parameters of State Budget for 2022

The Cabinet of Ministers of the Republic of Uzbekistan discussed the expected macroeconomic indicators for 2021, macroeconomic forecasts for 2022-2024, the draft State Budget for 2022.

According to UzA, preliminary statistics show that the country’s GDP grew by 6.9% in the first nine months of this year.

By the end of this year, GDP growth is expected to be around 6.5-7%. At the same time, the volume of industrial production is expected to increase by 9.1%, construction – by 6.6%, services – by 8.6% and agriculture – by 2.8%.

The main scenario of the country’s medium-term macroeconomic indicators forecast is that the average GDP growth rate over the next five years will be 6.5%.

In particular, GDP growth is estimated at 5.9% in 2022, and higher in the coming years.

The government has a task to increase the GDP per capita to $2,800 by 2026, increase it to $4,000 by 2030 and enter the top group of middle-income countries.

“During the meeting, it was emphasized that this can be achieved not only without delaying the planned structural reforms, but also through the full implementation of the country’s investment attractiveness. The activities of the heads of ministries and departments responsible for the implementation of reforms were critically assessed,” the report said.

It was noted that macroeconomic stability should be maintained, in particular, inflation should be reduced to 9% in 2022, in the medium term to 5%, public debt should be kept moderate and the state budget deficit should not exceed 3% next year.

In order to increase the investment attractiveness of the republic’s economy in the 2022 tax policy, a number of changes are being proposed:

•  reduction of the property tax rate for legal entities from 2% to 1.5% from January 1, 2022;
•  increasing the amount of investment discount in the calculation of income tax from 10% to 20% for new technological equipment, from 5% to 10% for buildings;
•  increasing depreciation rates by an average of 2.5 times.

In the draft State Budget for 2022, with the priority given to the allocation of funds to the social sphere, almost 45% of them are directed to education. In particular, taking into account all the activities in kindergartens and the increase in the number of attendees, it has been increased by 2.2 trillion soums compared to the current year. 

In 2022, 22.6 trillion soums or 11% of total expenditures are planned for the healthcare sector.

In 2022, the number of low-income families receiving social benefits will increase from an average of 1.2 million to 1,440,000 in 2021, covering 16.5% of all families. 5% of district and city budgets, or 1.4 trillion soums, will be directed to the financing of proposals submitted by citizens through the “Open Budget Portal”.

In 2022, the draft budget provides for sufficient funds to increase the amount of wages, social benefits, stipends and pensions at a rate higher than inflation.

The Budget Proposal for 2022 reflects the target indicators of development programs of ministries and departments for the next three years of budget expenditures, developed on the basis of technical assistance from experts of international financial institutions.

Taking into account the above, it was determined that in 2022 the consolidated budget deficit should be reduced from 5.5% to 3.0% of GDP this year.

Considering the proposals made at the meeting, the draft law on the State Budget for 2022 and the Budget Proposal will be submitted to the Legislative Chamber of Oliy Majlis.