The International Monetary Fund (IMF) has projected that real GDP growth in Uzbekistan will remain robust, exceeding 5.5% for both this year and the next. This optimistic outlook was shared by an IMF staff team, led by Yasser Abdih, following a visit to the country from September 16 to 24, 2024.
During their discussions with Uzbekistan’s authorities, the IMF team highlighted several key economic developments. The country’s economy experienced a 6.4% year-over-year (y/y) growth in real GDP during the first half of 2024, bolstered by strong investment and ongoing structural reforms.
While the overall economic performance remains solid, the IMF noted an increase in headline consumer price index (CPI) inflation from 8% at the end of April to approximately 10.5% in recent months, primarily driven by necessary increases in administered energy prices. Core CPI inflation has risen modestly, reaching 7% in August, reflecting the ongoing adjustments in the economy.
In terms of external factors, remittances have surged by 32% y/y during the first seven months of 2024, contributing positively to international reserves, which stood at 9.5 months of the following year’s imports by the end of August.
The IMF's outlook for Uzbekistan remains positive, with expectations that the current account deficit will narrow to around 6¼% of GDP in 2024 and 6.1% in 2025. This forecast is supported by strong exports, remittances, and fiscal consolidation efforts, even as risks such as regional geoeconomic challenges and commodity price volatility persist.
The IMF commended Uzbekistan's ongoing commitment to macro-financial stability and fiscal consolidation, with targets set for consolidated fiscal deficits of 4.0% and 3% of GDP for 2024 and 2025, respectively. However, the report warned of potential declines in the revenue-to-GDP ratio due to challenges in VAT performance and tax compliance.
Improvements in public financial management and fiscal risk management were also noted. The government has resumed publishing a fiscal strategy statement and is working on a comprehensive PFM reform strategy for 2025-2030.
The IMF team emphasized the need for a continued focus on reducing inflation to the 5% target set by the Central Bank of Uzbekistan (CBU) and recommended maintaining tight monetary policies until inflation trends demonstrate a consistent decline.
In conclusion, the IMF expressed appreciation for the hospitality and constructive discussions with Uzbekistan's authorities, underscoring the importance of collaboration to support sustainable economic growth and stability in the region.
Earlier, EBRD forecasted Uzbekistan’s economy to grow by 6.0% in both 2024 and 2025, driven by rising remittances, increased tourist arrivals, and stronger performance in the services and industrial production sectors. Continued market-oriented reforms and infrastructure investments are expected to support this growth. However, an energy deficit that has led to higher mineral-fuel imports may pose challenges and limit growth opportunities.
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