BAKU, Azerbaijan, Oct. 22
By Klavdiya Romakayeva - Trend:
The Central Bank (CB) presented three scenarios of macroeconomic development of Uzbekistan for the next three years, which were developed considering the impact of the pandemic on Uzbekistan’s economy and the economies of trading partners, Trend reports citing CB.
Macroeconomic forecasts were developed based on three different scenarios - the main scenario, providing for a gradual economic recovery, optimistic scenario, providing faster recovery and risky scenario of slower recovery.
The CB explained that when developing the scenarios, the impact of the COVID-19 pandemic on the economy of the country and the economies of foreign trade partners, prices for main export goods, as well as changes in the potential level of production were taken into account.
According to the main scenario, economic activity and aggregate demand in the country will approach pre-crisis levels by the end of 2021, and by 2023 the economy will return to its potential level. Budget revenues will be restored.
The consolidated budget deficit is forecast to decrease to 2.5 percent of GDP in 2022. Structural reforms will continue and the process of liberalization of regulated prices will take place in 2022-2023.
In addition, the current relatively tight monetary policy environment will remain in place until the end of 2021. In 2022-2023, they can be adjusted depending on the situation.
An alternative (optimistic) scenario includes a faster improvement in the situation with the pandemic, the absence of further quarantine measures, and the widespread use of antiviral vaccines and drugs from the second half of 2021 in the world.
In connection with the gradual recovery of the economies of the main trading partners, economic activity in Uzbekistan and aggregate demand are expected to approach pre-crisis levels by mid-2021, and by 2022 the economy will reach its potential. It is also envisaged to revive the growth rates in the transport, services and tourism sectors.
Along with the economic recovery, state budget revenues will grow relatively faster, and the consolidated budget deficit will be reduced to two percent in 2022.
In case of the risk scenario, domestic economic activity and aggregate demand are projected to reach pre-crisis levels only by the end of 2022, the economy will reach its potential level after 2023, and the consolidated budget deficit will remain at 6-7 percent.
In this scenario, the pressure on inflation from the side of demand factors will decrease, and the deviation of inflation from the forecast trajectory will allow softening monetary conditions a little.
“In all three scenarios, the inflation target of five percent by the end of 2023 and the constant goals to ensure the stability of the banking and payment systems will remain unchanged,” the Central Bank said.
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