Asian Development Bank raises economic growth prognosis of Uzbekistan

The Asian Development bank raised Uzbekistan’s gross domestic product growth projections to 5 percent in 2023.  This is stated in the new report of the Asian Development Bank.

According to ADB experts, the impact of Russia’s invasion of Ukraine on food and energy prices, as well as the decline in remittances in the future, could reduce household income and consumption in Uzbekistan in the second half of 2022.  Given this uncertainty, the Asian Development Bank has maintained its forecast of economic growth at 4% for 2022, rising from 4.5% in 2023 to 5%.

However, inflation slowed to 10.6% from 10.9% last year in the first half of 2022, despite rising food import prices, rising wages and pensions, and liberalizing grain prices.

In response to external inflationary pressures and the depreciation of the Uzbek som against the dollar, the Central Bank raised the key rate from 14 to 17 percent in March 2022, then lowered it to 16 percent in June and 15 percent in July.

According to State Statistics Committee, the gross domestic product in the first half of 2021 increased by 5.4 percent compared with the same period in 2021.

This occurred against a backdrop of slower growth in the industry to 5.1 percent and services to 7.3 percent.  At the same time, growth in the construction industry accelerated to 6.2%, and in agriculture to 2.7%.

Inflation in August was 12.3 percent compared to the same period last year.  Food products rose by 16.3%, non-food goods by 10.9%, and services by 7.1%.
Emerging Asia continues to recover, but the risks are high.  A significant slowdown in the world economy could seriously reduce demand for exports from the region.  Stronger-than-expected monetary tightening in developed economies could lead to financial instability.  Growth in China is hampered by repeated blockages and a weak real estate sector», said Albert Park, the ADB’s chief economist.

Developing Asian governments, he said, should be aware of those risks and take the necessary measures to contain inflation without slowing growth.