Newsletter Issue 13 | July – August 2021

Economic growth reaches pre-crisis level

After growing by only 1.6% last year due to the pandemic, the Uzbek economy is expected to return to strong growth of 5.0% in 2021. The pick-up in economic output is reflected above all in a significant increase in investment 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.


Newsletter Issue 12 | May – June 2021

Key bottlenecks for Uzbek exports to the EU

In April 2021, Uzbekistan received the GSP+ status from the EU, which significantly lowers tariff barriers for Uzbek products on the EU market. Against this background, we examine the bottlenecks for Uzbek products with the highest export potential in the EU – fruits and vegetables as well as apparel.

For fruit and vegetables, we identify as most pressing bottlenecks the cold chain, the availability of high-quality packaging and food safety certification. In the case of apparel, the poor image about labour standards is a significant obstacle, which prevails despite Uzbekistan meeting ILO standards. Another pressing bottleneck is the expensive audit of compliance with social standards.

To overcome these bottlenecks, we recommend supporting investment into precooling facilities, reducing Uzbek import duties for packaging and providing education, training and financial support for quality management at companies. In the case of apparel exports, we suggest an information campaign in the EU on compliance with ILO standards and a state support scheme for international social responsibility standards certification.


Newsletter Issue 11 | March – April 2021

Reform proposals from German companies in Uzbekistan

Reforms to modernise Uzbekistan towards an open market economy are proceeding at pace. To support this effort, the German Economic Team (GET) and German business associations active in Uzbekistan presented a study of 18 reform proposals. The proposals are based on suggestions from companies and hence constitute concrete steps to solving practical problems. If implemented, they will contribute to further improving the investment climate, thus unlocking more investment in Uzbekistan.


Newsletter Issue 10 | January – February 2021

COVID-19 pandemic slows growth only temporarily

Despite the COVID-19 crisis, the economy in Uzbekistan grew by 1.6% in 2020. In sectoral terms, agriculture showed the greatest growth momentum with 3%. Government consumption also increased, while investments declined. For 2021, significantly higher growth of around 5% is forecast, which is roughly at pre-crisis levels.


Newsletter Issue 09 | November – December 2020

Uzbek exports to the EU in 2019 amounted to just USD 160 m or 1% of total goods exports, which is low compared to other Central Asian countries. At the same time, the Uzbek Government is very interested to increase exports to the EU and thus to diversify.


Newsletter Issue 08 | September – October 2020

Demographic transition, COVID-19 and labour migration

Uzbekistan’s working-age population will increase by up to 1% per year until 2040, thus requiring up to 300,000 new jobs per year. Under optimistic assumptions about the economic recovery from the COVID-19 pandemic, the number of Uzbekistani labour migrants abroad could grow by 50,000 per year in the long run, so that one in six extra jobs needed could be found abroad. In the short run, however, the COVID-19 pandemic has reduced the number of migrants by one fifth to 2 m during the first half of 2020 with unemployment and economic inactivity rising sharply. To harness labour migration for job creation and development, Uzbekistan is implementing a comprehensive set of measures including job placement abroad, obligatory language and skills training and consular support for migrants. These measures are well-advised and, going forward, will benefit from evaluation, prioritization, and updating in line with international best practices.


Newsletter Issue 07 | July – August 2020

Prospects for Uzbekistan’s energy sector

Uzbekistan’s energy sector still heavily depends on natural gas. As domestic reserves are depleting and the demand for electricity is increasing, the Uzbek government wants to diversify the country’s energy supply. The large-scale expansion of wind and photovoltaic (PV) electricity generation, the construction of the country’s first nuclear power plant and the replacement of the old power plant fleet with more efficient gas-fired plants are at the core of the government’s 2030 investment plan. Using an electricity system model, we show that the plan’s strong focus on inflexible baseload generation implies excessive system costs. We find that a higher deployment of flexible generators and renewables would reduce system costs. In 2019, a first PV tender had promising results.


Newsletter Issue 06 | May – June 2020

Impact of COVID-19 on the Uzbek economy

The Uzbek economy is projected to grow by 1.5% in 2020 – before the COVID-19 crisis, an increase of 6% had been expected. The lower figure results from lower growth in consumption and investment as well as in services and industry. Agriculture is almost unaffected by the crisis.


Newsletter Issue 05 | March – April 2020

Small and medium-sized enterprises in Uzbekistan

The economic significance of private small and medium-sized enterprises (SMEs) for the Uzbek economy is still very limited. In the past, the state has primarily promoted private small enterprises with tax concessions and subsidised loans, but the government has now set itself the goal of increasing the importance of the private SME sector.


Newsletter Issue 03 | November – December 2019

Export potential for Uzbek textile and apparel

The manufacture of textile and apparel is among the key sectors of the Uzbek economy. In 2018, it ac-counted for 17% of manufacturing and provided 11% of goods exports. The main destination of Uzbek exports are neighbouring countries. Russia, China, Kazakhstan, Kyrgyzstan and Iran absorb 81% of the sector’s exports.


Newsletter Issue 02 | September – October 2019

Cluster-oriented reform model for free economic zones

The first free economic zone (FEZ) in Uzbekistan was established in 2008. Since then, 20 additional FEZ were created throughout the country. Drawing on international experience, a reform process has been initiated in 2018 to increase the effectiveness of the zones. As one reform option, a cluster-oriented model has been examined.


Newsletter Issue 01 | July – August 2019

Positive economic outlook thanks to reform dynamics

For two years now, Uzbekistan is in the focus of many international observers. President Mirziyoyev has ini-tiated a comprehensive reform and modernisation process, which aims to transform the country from a closed, state-centred economy into an open market economy.