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EBRD reveals forecast for Uzbekistan’s GDP growth in 2020

Business Materials 6 November 2019 18:37

BAKU, Azerbaijan, Nov. 6

By Fakhri Vakilov-Trend:

European Bank for Reconstruction and Development (EBRD) predicts Uzbekistan’s GDP growth at 5.5 percent in 2019 and at 5.8 percent at 2020, Trend reports citing EBRD’s November Report on Economic Forecasts.

Uzbekistan’s economy continued growing steadily in the first three quarters of 2019 at 5.7 percent year on year on the back of strong performance in industry and construction, read the message.

According to EBRD, exports increased by 45 per cent year on year in US dollar terms in the first eight months of 2019, and imports by 33 per cent, reflecting trade liberalization policies. Credit expansion remains high at 60.4 percent year on year in August 2019, supporting the growth of infrastructure investment and surging imports.

Average inflation decelerated to 14.1 per cent in the first three quarters months of 2019 from 18.2 per cent during the same period in 2018.

This stems mostly from slower growth in food prices, which has compensated for an increase in services inflation. Uzbekistan’s Central Bank has kept the policy rate unchanged at 16 percent since Sept. 2018, read the message.

As of August 2019, the monetary authorities removed the five per cent limit on daily exchange rate fluctuations, allowing the rate to be determined by the market.

In addition, the sale of foreign currency by commercial banks is now allowed for purposes other than business or tourist travel, including in cash form, which was not previously possible. This is part of a wider set of measures to further liberalize the foreign exchange market.

As a result, the exchange rate depreciated by around 12 per cent relative to the beginning of the year. GDP is expected to grow by 5.5 per cent in 2019 and 5.8 per cent in 2020 due to sustained growth in investment, both domestic and foreign, helped by rapid credit expansion, read the message.

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