Regional Economic Prospects in the EBRD Regions

Uzbekistan

Economic growth accelerated slightly, to 6.4 per cent year on year in the first half of 2024. The services sector contributed 2.8 percentage points to GDP growth, supported by increased remittances and tourist arrivals.

Industrial production expanded by 7.8 per cent, with 9.4 per cent growth in manufacturing.

Energy shortages amid lower gas extraction led to a 78 per cent increase in mineral fuel imports in January-July 2024 (including an almost five-fold increase in gas imports), resulting in a trade deficit of US$ 7.3 billion.

The consolidated budget deficit reached 2.6 per cent of GDP as of the first quarter of 2024.

Budget subsidies to the energy sector accounted for more than 70 per cent of total subsidies in the first half of 2024, with subsidies allocated for covering the losses owing to the difference between import price of natural gas and the price in the domestic market almost fully used up.

At 10.5 per cent year on year as of July 2024, inflation remained more persistent than that of regional peers amid expansionary fiscal policy, currency depreciation and energy tariff adjustments.

Nevertheless, the Central Bank opted for a small rate cut in July, bringing its policy rate down from 14 to 13.5 per cent.

The economy is projected to expand by 6 per cent in 2024 and 2025 on continued market-oriented reforms and infrastructure investments. However, energy deficits could pose challenges and limit growth opportunities.

Source: The European Bank for Reconstruction and Development (the “EBRD”)