Briefing Notes for the Launch in Tashkent, March 2009
Growth performance and medium-term prospects
- The economy of Uzbekistan was expected to grow at a healthy pace in 2008. GDP growth
in the first nine months of 2008 was 9.4%. Industrial output and retail trade grew by 12.4%
and 15.0%, respectively, in that period. Gross fixed investment grew more than 20%, and
foreign trade turnover benefited from an expansion in exports in the first nine months of
the year. Key commodities such as cotton, gas and gold received a boost from strong
- Uzbekistan has significantly accelerated its economic growth and strengthened its fiscal
position over the past five years. GDP is expected to grow 7.0% in 2009. Benefitting from
sound fiscal and monetary policies, Uzbekistan is expected to continue its tax and banking
reforms, liberalize its trade and payments systems and adopt a more flexible exchangerate
policy. The country’s 2009 budget is expansionary, envisaging a further increase in
public-sector wages, benefits, pensions and student grants.
Fiscal policy developments
- The Government of Uzbekistan maintained a relatively prudent fiscal stance to keep the
State budget in balance in 2008. Fiscal performance has improved in recent years, owing
to strong economic growth, high commodity prices and tax reforms. Favourable trends in
export revenue could help the Government meet additional social spending on publicsector
wages and pensions.
- Inflation in Uzbekistan was expected to exceed 10% in 2008 due to rising food and fuel
prices. To reduce inflationary pressures, monetary policy was tightened in late 2007. But
strong export-related inflows and large increases in public-sector wages maintained
inflationary pressure in 2008. A moderate nominal appreciation of the national currency,
the som, was expected to control inflation in 2009 and reduce reliance on indirect tools of
Current account and trade performance
- The current account of Uzbekistan was expected to have a surplus of 21.7% of GDP
because of a large trade surplus and increased remittances from citizens working abroad.
Rising global prices on the country’s principal export commodities – gold, gas and cotton –
were expected to increase export revenues by more than 24% in 2008, and hydrocarbons
became a more important source of income than in the past. Growing remittances were
expected to ensure a surplus of current transfers.