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Woldemar Walter

With strong growth through the pandemic

The Uzbek economy grew by 7.4% last year, thus achieving a higher momentum than before the pandemic. The main growth driver was private consumption. Among sectors, services and industry grew strongly. For 2022, growth is forecast to remain high at 6%.

  • Uzbekistan
NL 16 | January-February 2022
Macroeconomic Analyses and Forecasting

The Uzbek economy grew by 7.4% last year, thus achieving a higher momentum than before the pandemic. The main growth driver was private consumption. Among sectors, services and industry grew strongly. For 2022, growth is forecast to remain high at 6%.

In contrast to global trends, inflation has fallen to around 10% at the end of 2021. A similar rate is expected for the current year. The local currency, the Sum, remained largely stable against the US dollar in 2021. Foreign trade shows a clear revival. Exports grew by 7% overall in 2021 despite a sharp decline in gold exports. The increase in imports was even stronger, reaching 19%. Due to higher expenditures related to the pandemic, the budget deficit has increased to an estimated 5.5% of GDP in 2021, but this does not pose a threat to fiscal sustainability. The deficit is expected to fall again in 2022.

Uzbekistan is thus weathering the pandemic very well but can also build on substantial international support. Provided that the pace of economic reforms is maintained, we expect the positive development to continue in the coming years.

Strong economic growth

Uzbekistan’s GDP growth reached 7.4% in 2021, surpassing the level before the pandemic. Growth was primarily based on a rise of private consumption, which increased by 10.3% yoy from January to September 2021. Investment also recovered after the decline in 2020, rising by 5% in the same period.

Among sectors, industry (+8.7%) and services (+9.4%) showed particularly strong growth in 2021. Agriculture also performed well with a growth of 4% compared to the previous year.

In 2022, GDP growth is projected to remain high at 6%. The assumptions underlying this forecast are the continuation of the global recovery and the pandemic remaining manageable.

Inflation continues to decline

Inflation was at 10% at the end of 2021. This is a decrease compared to previous years and was achieved despite globally rising inflation rates. Rising food and energy prices were the main drivers of inflation.

For 2022, inflation is expected to reach around 10% again, but to drop into single digits in 2023. The Central Bank kept the policy rate at 14% p.a. despite declining inflation. However, with inflation continuing to fall, the policy rate is also likely to fall in the medium term.

Exchange rate broadly stable

International reserves remain at a very high level. They amounted to USD 34.8 bn or about 12 months of import coverage at the end of 2021, providing a comfortable buffer in case of external shocks.

The current account deficit is estimated by the IMF to have reached 6% of GDP in 2021. However, it is likely to be smaller, as GDP growth was stronger than forecast. In addition, remittances have also grown strongly by 34% compared to the previous year, totalling USD 8.1 bn in 2021. It is positive that the current account deficit is being financed primarily through inflows of FDI and loans from international donors. This forms the basis for investments and reforms and thus for future economic growth.

Recovery of foreign trade

Uzbek exports as well as imports increased in 2021. Exports grew by 7% compared to the previous year, with exports of textiles (+63%) and metals (+57%), in particular, rising strongly. However, exports of gold – Uzbekistan’s most important export item – fell by 29%. Excluding gold, the growth in goods exports amounts to as much as 36%.

Imports increased by 19% based on strong domestic demand. The strongest increase was noted for minerals (+40%) and chemical products (+23%). The growth of chemical products is mainly the result of the increased demand for pharmaceuticals in the context of the pandemic. Foreign trade is likely to continue to grow in the coming years with increasing integration in international value chains.

Budget deficit to decline again

The budget deficit is estimated to have reached 5.5% of GDP in 2021 and was thus higher than in previous years.

The deficit is linked to comprehensive government support for the population and the economy during the pandemic, spending on the health system and on public infrastructure. The gradual withdrawal of anti-crisis measures is expected to bring the deficit down again this year.

Public debt is estimated to have reached 40.6% of GDP by the end of 2021, which is moderate by international standards. Following significant increases in recent years, however, debt is expected to decline again from 2023 onwards. The risk of over-indebtedness remains low.


Uzbekistan is growing strongly despite the pandemic. The very solid economic development is not least the result of the reform efforts of the past years and the comprehensive support of international donors. Uzbekistan’s continued ambitious reform course promises that this high level of growth can be maintained in the medium and long term.