Fitch Solutions' 2023 forecast for Uzbekistan's real GDP growth stands at 5.0%. Q2 of 2023 data suggests resilience in the face of the Russia-Ukraine conflict and sanctions against Russia. Q1 2023 remittances were strong, fostering household consumption. An uptick in labor migration to Russia by 72.0% (to 630,000 people) signals steady remittances. A 5.6% GDP growth in 2024 is projected, buoyed by increased investments and domestic demand.
2023 Private Spending: Persistently Robust
A 2.7% contribution from private spending in 2023, rising to 3.0% in 2024 is anticipated. Q1 2023 remittance resilience supports household consumption. Worker migration to Russia surged by 72.0% to 630,000 people in Q1 2023 from Q1 2022. Showing Uzbekistan's robust Human Capital.
Government Spending: Rising in 2023 and 2024
A 0.4% contribution from government spending in 2023, increasing to 0.5% in 2024, is predicted. Policy focus includes expansion of higher education, increased student financial support, construction of 170 schools, and doubling teachers' salaries within seven years.
Capital Formation: 2023 and 2024 Projections
Gross fixed capital formation is estimated to contribute 3.9% in 2023 and 2024. The government plans to build five new hydroelectric power plants, worth 0.2% of GDP. An investment and trade contract with Italy worth around 14.9% of GDP (€2.2bn) was also signed in June.
Tourism and Foreign Investment: Key Drivers
The government has allocated USD17.8mn for tourism development for 2024-2025. An influx of 5.2mn tourists in 2022 underlined infrastructural gaps in the sector. Foreign direct investment into Uzbekistan increased by 11.0% to USD2.5bn between 2021 and 2022, indicating a commitment to economic reforms.
Net Exports: Negative Impact on 2023 GDP Growth
Net exports are expected to detract 1.9% from the GDP growth in 2023. Preliminary data show a 23.0% rise in exports, primarily gold, and a 17.0% rise in imports, mainly cars, equipment, and chemical products.
Outlook Risks
Risks are balanced. Dangers include a decrease in remittances due to the ruble weakening and reduced investments due to Russia's economy shrinking and global financial instability. Positives include high global gold and natural gas prices and ongoing privatization efforts.
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