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Woldemar Walter

Economic growth reaches pre-crisis levels

The Uzbek economy will return to its pre-crisis level in 2021. Economic growth is expected to be strong this year at 5%.

  • Uzbekistan
NL 13 | July- August 2021
International Trade and Regional Integration
Labour Market and Migration
Macroeconomic Analyses and Forecasting

After the Uzbek economy grew by only 1.6% last year due to the pandemic, strong growth of 5.0% is expected again for 2021. The pick-up in economic performance is mainly reflected in a significant increase in investments and services. Exports also grew strongly by 12% in the first half of 2021, and imports by as much as 15%. Likewise, remittances show a significant increase of 37% compared to 2020.

Other indicators also show a positive picture: inflation is expected to fall below 10% by the end of 2021, the exchange rate has remained largely stable against the US dollar so far in 2021 and the very high reserves of USD 35.5 bn provide a solid buffer against potential further shocks. The fiscal deficit was much lower than expected at 4.4% of GDP in 2020. For 2021, a deficit of 5.5% is expected, which is justified by increased investment and does not jeopardise fiscal sustainability.

However, the short-term growth outlook depends on the recovery of the economy among trading partners, infection dynamics and ultimately the pace of Uzbekistan’s vaccination campaign.

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