The World Bank has recently published its latest economic update for Europe and Central Asia. This report evaluates the economic conditions of more than 20 developing nations in Central and Eastern Europe, the Western Balkans, Central Asia, and the South Caucasus, along with Türkiye and Russia.

Here’s the Economic Outlook for Uzbekistan for 2024:

GDP Growth: Uzbekistan's GDP is expected to grow by 5.3% in 2024, driven by fiscal consolidation and structural reforms, including state-owned enterprises (SOEs) restructuring and privatization. Despite slower export growth to major trading partners Russia and China, this growth is bolstered by significant investments in the energy sector.

Inflation: Inflation is anticipated to rise in 2024, influenced by increases in domestic energy prices due to tariff reforms. However, the impact will be mitigated by a tight monetary policy as the Central Bank of Uzbekistan advances towards full inflation targeting. Inflation rates are expected to slow to 8% in the medium term, which remains above the central target of 5%.

Imports and Consumption: While the growth in imports is expected to slow, it will continue to support economic modernization and increased consumer spending.
 

Remittances and Current Account: Remittances are projected to decrease due to fewer labor migrants traveling to Russia. This, combined with strong import levels, will lead to a slight widening of the current account deficit. However, the deficit remains sustainable, supported by foreign savings that finance it.

Poverty Reduction: The poverty rate is projected to drop to 4.3% in 2024, aligning with improvements in economic conditions.
 

Fiscal Health: The fiscal deficit is set to decrease to 4.2% of GDP in 2024, with further reduction expected by 2026. This improvement stems from reducing large, untargeted energy subsidies and ineffective incentives to SOEs, alongside increased budget revenues from privatization.

Public Debt: Public debt is projected to increase slightly to 36.5% of GDP in 2024 but will decrease to 34.4% by 2026, staying well within the government’s debt limit of 60% of GDP.
 

Risks: The economic outlook faces several risks. Externally, there could be a slowdown in growth in key markets like China and Russia, along with tighter financial conditions globally. Domestically, risks include liabilities from SOEs, public-private partnerships, and state-owned banks. On the upside, potential benefits could arise from higher global prices for gold and copper and enhanced productivity from ongoing reforms.
 

Source: World Bank Uzbekistan