The Ministry of Economy and Finance of Uzbekistan has unveiled the country's 2024 budget, shedding light on key economic indicators and financial projections for the upcoming year. The budget announcement comes on the heels of a tumultuous global landscape, making it crucial for Uzbekistan to navigate its economic path wisely. Here are the highlights from the 2024 budget:
Steady Economic Growth
The 2024 budget forecast anticipates a continued uptick in Uzbekistan's economic growth. In particular, against the backdrop of ongoing global political and economic situations, the growth rate of Uzbekistan's economy is expected to range between 5.6% and 5.8% in 2023-2024. Looking further ahead, the nation's economic growth is projected to rise to 6.2% to 6.4% in 2025-2026. The IMF, World Bank, and Asian Development Bank all project steady growth ranging from 5.5% to 5.8% which aligns with national forecasts.
Inflation Rate on a Downward Trajectory
Addressing concerns about inflation, the budget outlines an encouraging trend. In 2022, the inflation rate in Uzbekistan stood at 12.3%. However, the government is actively working to curb inflation, and it is expected to decrease to approximately 9.0% in 2023, providing a more stable economic environment for businesses and citizens alike.
Revenue Growth in 2023
The budget reveals an optimistic outlook for revenue generation in 2023. Against the approved forecast, Uzbekistan expects to accrue an additional UZS 993.0bn (approx. $81mn), demonstrating a strong fiscal performance and an efficient revenue collection system.
Revised Consolidated Budget for 2023
The Ministry of Money and Finance has revised the consolidated budget for 2023, with a focus on state budget expenditures. Expenditures are projected to increase by 9.5% by the end of the year. Moreover, the consolidated budget deficit is expected to be around 5.5% of the Gross Domestic Product (GDP). These adjustments reflect the government's commitment to bolstering key sectors of the economy.
2024 Fiscal Projections
For the fiscal year 2024, Uzbekistan has laid out its consolidated budget forecast. Total revenues are estimated to reach UZS 375.0 trillion (approx. $30.6bn), while expenditures are projected at UZS 427.5 trillion (approx. $34.8bn). Notably, the consolidated budget is planned with a deficit of 4.0% compared to the country's GDP. These fiscal projections are carefully calibrated to balance economic growth and financial stability.
State Securities Issuance
In 2024, the government plans to issue state securities on behalf of the Republic, with a net volume limited to UZS 25 trillion (approx. $2bn). This represents an increase from the UZS 17 trillion (approx. $1.4bn) issued in 2023. The move is aimed at ensuring adequate financing for essential public projects while managing fiscal responsibility.
CERR projections:
Uzbekistan's 2023 GDP growth is expected to reach 5.6%, a slight increase from the previous estimate of 5.5% by the Center for Economic Research and Reform (CERR). This positive outlook is based on modern forecasting tools recommended by the IMF. Notably, the first nine months of 2023 saw growth in various sectors, with industrial activity up by 5.7%, market services expanding by 12.1%, and foreign exports surging by 23.5%.
Factors contributing to growth include government policies, structural reforms, increased investment, and higher global metal prices. Consumer spending is projected to rise by 4.8%, with a 7.6% increase in gross investment. Exports are expected to grow by 20.8%, and imports by 21.4%. However, risks from decreased activity in trading partners and remittance fluctuations remain. The 2023 growth corridor is set between 5.4% to 5.6%, with forecasts for 2024 indicating further expansion.
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