RAEX: Structural reforms in public sector of Uzbekistan’s economy to support the economic development

Uzbekistan Materials 23 September 2020 15:28 (UTC +04:00)

BAKU, Azerbaijan, Sept. 23

By Klavdiya Romakayeva - Trend:

Due to the COVID-19 crisis in Uzbekistan, economic growth in 2020 is expected to be substantially lower than it was in 2019, rating analyst at RAEX-Europe Denys Anokhov told Trend.

RAEX-Europe anticipates the year-end GDP growth at 1.5 percent, with a subsequent recovery to 5-6 percent in the medium term.

“However, a second wave of the pandemic and further restrictive measures would negatively affect our base case scenario. In addition, we expect a sharp increase in the unemployment rate due to the contraction of the main labor markets for Uzbekistan, namely Russia and Kazakhstan,” said Anokhov.

At the same time, the ongoing structural reforms of the public sector of the economy and package of anti-crisis measures for the population and business will support further economic development and the investment climate in Uzbekistan.

The economy of Uzbekistan showed accelerated growth rates in 2018-2019, primarily due to active domestic capital investments, which started after decades of poor development. Tax reforms launched in 2017, as well as the liberalization of prices, foreign trade, and currency operations have also contributed to the revitalization of the economy.

From 2019 the government has initiated ambitious structural reforms in the public sector aimed at improving the efficiency and competitiveness of the economy and financial sector, as well as the investment attractiveness of the country. These reforms include new packages of laws enhancing investment attractiveness in Uzbekistan, improvements of tax policy and new tax code, privatization plans of the government companies, and banks.

“In addition to the research reports, which are released when the credit ratings are reviewed (twice a year), we prepare periodically research reports on the Uzbekistan banking system and research reports on the insurance industry of Central Asian countries,” noted the analyst.

Regarding Azerbaijan, the research work of the agency is currently presented by the country’s research reports during the revision of the credit ratings, as well as a review of the development of the green finance market, presented in the webinar “Perspectives for Responsible Financing in Kazakhstan”.

“We will continue to monitor the development of green finance market in Azerbaijan and in case of its development, conduct online events, similar to our webinars on other CIS (Commonwealth of Independent States) and the Black Sea region countries,” said Anokhov.

RAEX-Europe is a credit rating agency established in Frankfurt am Main, Germany. The agency is a business unit of International group RAEX operating in the European Union since 2013.


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