CERR expert: The economy of Uzbekistan will maintain stability
CERR expert: The economy of Uzbekistan will maintain stability and a dynamic pace of development until the end of the year
“The economy of Uzbekistan in the first half of 2023 maintained a high growth rate and remained resistant to changes in the unstable external environment,” Ruslan Abaturov, chief researcher at the Center for Economic Research and Reforms (CEIR) , comes to this conclusion in his analytical article presented by Dunyo News Agency :
According to the Agency of Statistics, the gross domestic product (GDP) of Uzbekistan grew by 5.6% in the first 6 months of this year, which is higher than in the same period in 2022 (5.4%).
Despite the persistence of geopolitical instability, the economic situation in neighboring countries in January-June of this year was generally favorable. Thus, in Kazakhstan the economy grew by 5%, in Kyrgyzstan by 3.9%. In China, GDP growth was 5.5%. According to the estimates of the Ministry of Economic Development of Russia, the country’s GDP in January-May increased by 0.6% compared to the same period of the previous year.
Inflation in Uzbekistan continues to slow down and, following the results of 6 months, shows the lowest rates over the past 5 years. In January-June, prices increased by 3.5%, while for the same period in 2022 – by 6.5%. In annual terms, inflation slowed to 9% (in June 2022 – 12.2%). Food inflation slowed down from 8.9% in January-June 2022 to 4.1% over the same period this year. Similarly, the growth in prices for non-food products slowed down from 5.8% to 3.1%, for paid services – from 3.3% to 2.9%.
Investments in fixed assets increased by 7.9% over 6 months (in January-June 2022 – 6.6%). The main inflow came from non-centralized investments, whose growth rate was 8.7%. Of these, investments at the expense of enterprises increased by 15.8%, household funds – 8.7%, commercial bank loans and other borrowed funds – 36.5%. In addition, there is a double-digit dynamics in attracting foreign direct investment at the level of 21%.
Investments from centralized sources in the first half of the year grew by 2.4%, in particular, at the expense of budgetary funds by 3.6%. Foreign investments and government-guaranteed loans increased by 6.9%.
In general, in the investment structure, the share of centralized ones decreased from 13% in January-June 2022 to 12.3%, the share of non-centralized ones increased from 87% to 87.7%, respectively.
It should be noted that the share of investments directed to the manufacturing industry increased to 30.2% (28.9% in the first half of 2022), the mining industry to 8% (6.1%).
Industrial production in the first 6 months grew at a faster pace compared to the same period in 2022 – 5.6% versus 5.1%, respectively.
The main factors of economic growth are associated with the timely adoption of urgent measures to support entrepreneurs, as a result of which the growth in the manufacturing industry amounted to 6.3% (5.9% in the first half of 2022), the mining industry – by 0.2% (-0. 5%).
Also, the most dynamic among industrial sectors was the growth of electricity supply by 9.9%, which, however, is lower than in January-June 2022 (growth by 14.7%).
In addition, in the first half of the current year, the sectors that were declining last year also grew. In particular, in the mining industry there was a slight increase of 0.2% (in January-June 2022, a decrease of 0.5%), the sector of water supply, sewerage, waste collection and disposal grew by 3.6%, against a reduction of 11, 6% for the first 6 months of 2022.
The dynamics in the construction sector slowed down somewhat from 5.1% in January-June 2022 to 4.8% over the same period of the current year.
In agriculture, in particular in crop production and animal husbandry, there is an acceleration in output growth rates up to 3.8% (in January-June 2022 – 2.7%). At the same time, the growth rates of forestry and fisheries slowed down somewhat.
The volume of market services provided for the first 6 months of 2023 increased by 12.3% (for the same period in 2022 – 14.5%). In terms of sectors, communication and informatization services grew at double-digit rates – by 22.9%, financial services – 22.7%, education services – 19.5%, accommodation and catering – 10.4%. In the transport sector, the volume of services increased by 8.6%. Growth rates of cargo turnover and passenger turnover slowed down.
There is a slowdown in the growth rate of retail trade turnover from 9.9% in January-June 2022 to 6.9% for the same period in 2023.
Foreign trade turnover in the first half of the year increased by 19.4% to $29.2 billion. Export volumes increased by 23% to $12.1 billion, imports – by 17% to $17 billion.
The growth in exports is due to an increase in deliveries to foreign markets of machinery and transport equipment by almost 60%, gold – by 47%, services by 41%, food products by 33%, various finished products by 25%. At the same time, the export of non-food raw materials decreased by 26%, fuel and energy resources by 20%.
In imports, an increase in supplies to Uzbekistan is noted for fuel and energy products by 73%, machinery and transport equipment by 30%, and chemical products by 10%.
In general, the main trends in the first half of the year were strengthening macro-resilience and reducing the impact of negative factors on the economy, supporting the positive growth dynamics of economic sectors, and strengthening investment activity. It is expected that by the end of the year the economy of Uzbekistan will maintain stability and a dynamic pace of development.
