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.