Baku, Azerbaijan, Aug 23
By Fakhri Vakilov-Trend:
World Bank (WB) has published a report on the development of the economy of Uzbekistan, Trend reports with reference to WB.
GDP growth is projected to rise to 6 percent in 2021, supported by market reforms to address production bottlenecks and liberalize the economy, read the message.
WB’s report stated that inflationary pressures are likely to persist in 2019–20 due to: the continued liberalization of administrative prices, increased policy lending via state-owned banks to support investment growth, and public wage increases.
Tightening of monetary and credit policies will be required for inflation to moderate by 2021.
The external deficit is likely to be financed by increased donor support and a gradual increase in inflows of foreign direct investment (FDI), read the message.
Gross external debt in Uzbekistan is projected to decline modestly to about 39 percent of GDP by 2020.
Public debt is likely to increase to about 25 percent of GDP in 2020. Steady growth of remittance inflows and robust economic growth are expected to contribute to a modest reduction in the poverty rate.
The government of Uzbekistan is advised to realign the state’s role in the economy, while addressing the remaining constraints to private sector development, read the message.
Measures to address these constraints include:
- increasing access to credit and improving the investment climate;
- fully implementing the tax administration reform;
- ensuring the transparency of state budget operations – particularly regarding inefficient implicit subsidies to state-owned enterprises (SOEs);
- reforming land user and ownership rights in the industry, services, and agriculture sectors;
- restructuring monopoly SOEs and strengthening their corporate governance and financial reporting requirements;
- providing state support to export-orientation (including International Organization for Standardization (ISO) quality certification, export risk mitigation, diversification, and WTO accession).
Over the medium-term, upgrading of infrastructure – in particular in the power and transport sectors – and improving access to quality higher education will help underpin a stronger economic potential of Uzbekistan, read the message.
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