ADB maintains growth forecast for Uzbekistan’s economy in 2022

GDP growth is expected in the countries of the Caucasus and Central Asia by 3.9% (instead of the previous forecast of 3.6%), and in 2023 – by 4.2% (instead of 4%) in 2022. This is stated in the new ADB report, according to the Darakchi portal.

Russia’s military operation in Ukraine affects the cost of food and energy, as well as a decrease in remittances in the future. It is possible that household income and consumption in Uzbekistan will decrease in the second half of 2022, ADB experts believe.

Given these uncertainties, ADB maintained its economic growth forecast of 4% for 2022, while for 2023 it was raised from 4.5% to 5%.

Inflation will also rise and this may negatively affect the growth of the economy, reducing the real incomes of the population.
At the same time, ADB notes that inflation in Uzbekistan slowed to 10.6% in the first half of 2022 from 10.9% a year earlier. This has happened despite the higher cost of imported food, higher wages and pensions, and the liberalization of grain prices.

To stabilize food prices, the authorities exempted basic food products from taxes and customs duties until the end of the year, which helped reduce food inflation from 15.5% to 14.2%, the ADB review notes.

If in the April report, ADB expected inflation of 9% in 2022 and 8% in 2023, now the forecast has been downgraded to 12% and 11%, respectively, due to the expected increase in energy tariffs in the second half of this year and continued high prices for imported food.

“Emerging Asia continues to recover, but the risks are high,” said ADB chief economist Albert Park. — A significant downturn in the global economy will seriously undermine the demand for exports from the region. Stronger-than-expected monetary tightening in advanced economies could lead to financial instability. And China’s growth is facing challenges due to repeated lockdowns and a weak real estate sector.

Emerging Asian governments should remain vigilant about these risks and take the necessary steps to contain inflation without dampening growth, Park said, the portal concludes.

Uzbekistan is a Central Asian country with a potential economy with a population of about 40 million people and great export opportunities. Since the current President Mirziyoyev came to power, major reforms have been carried out in the country in all areas, including the economy.

inozPRESS.kg,
Sept. 28, 2022