IMF expects economic growth of Uzbekistan to remain strong in 2022

Uzbekistan Materials 11 December 2021 14:40 (UTC +04:00)
IMF expects economic growth of Uzbekistan to remain strong in 2022

BAKU, Azerbaijan, Dec.11

By Natavan Rzayeva- Trend:

According to the International Monetary fund, the economic growth in Uzbekistan is projected to reach 7 percent this year and is expected to remain strong in 2022, at about 6 percent, Trend reports citing the press services of the fund.

Inflation in the country has remained elevated due to food and commodity price pressures, reflecting global trends, and is expected to end of 2021 at about 10 percent.

An International Monetary Fund mission, led by Mr. Ron van Rooden, met with the authorities of Uzbekistan during December 2–10, 2021 to discuss economic developments and prospects.

Building on the impressive progress made in recent years, the Uzbek authorities plan to continue macro-economic policies and advance structural reforms in the country. This will help to ensure strong and sustainable growth in the years ahead, improve people’s incomes, and reduce poverty.

The outcomes from the meeting of IMF staff and Uzbek authorities are below:

-To ensure fiscal sustainability, the authorities aim to reduce the budget deficit from almost 6 percent of GDP in 2021 to close to 3 percent of GDP in 2022 and beyond.

-To further underpin fiscal sustainability, the authorities plan to adopt a new debt law that will limit public and publicly guaranteed debt to 60 percent of GDP.

- Achieving Uzbekistan’s development goals, while fiscal policy is tightened, will require further improving the effectiveness of public spending and increasing revenue mobilization.

-The Central Bank of Uzbekistan’s relatively tight monetary policy remains appropriate to achieve a gradual reduction in inflation.

-Financial reforms are underway, with the authorities improving state-owned banks’ governance and starting their privatization. Further efforts are needed to enhance financial intermediation and to reduce the large role of state-owned banks in the banking system. A healthy and competitive banking system is needed to increase deposit mobilization and help finance private sector growth.

-The authorities are increasingly focusing on regional development to ensure equitable and inclusive growth.

-The authorities are rightly focusing on facilitating strong private sector-led growth. With a fast-growing labor force, new jobs will need to come especially from small and medium-sized private enterprises.