After the country gained independence, the government of Uzbekistan chose a course towards the gradual transformation of a command economy into a market one. Progress has been slow, but over time significant achievements of such policies have become visible. Uzbekistan's GDP grew by as much as 7% in 2014, despite the barely ending global economic crisis. However, the country has yet to bridge the gap between the official exchange rate of its currency and the black market.
Now the country needs significant structural reforms, in particular, in the field of improving the investment climate, strengthening the banking system, deregulation of the agricultural sector. So far, government intervention continues to have a negative impact on the economy. The joint work of the government of Uzbekistan and the IMF has significantly reduced inflation and the budget deficit, which significantly reduced the number of people below the poverty line.
General information
New presidential elections in the country will be held on December 4, 2016 in connection with the death of Islam Karimov. Until that time, Prime Minister Shavkat Mirzyaev will perform official duties. Presidential elections should increase political stability in the country. Over the past decade, Uzbekistan's economy has developed rapidly. However, today it needs new engines of growth.
The increase in consumption in recent years has been driven by increased exports of gas, gold and coal. However, the volume of extraction of these natural resources cannot be increased indefinitely, moreover, world prices for them have fallen significantly. Therefore, the country needs a reform that will ensure the stable development of the economy. It is expected that GDP growth in Uzbekistan in 2016 will slow down, which is due both to the above reasons and the problems of leading trading partners, in particular, the Russian Federation.
Key indicators
According to the latest available data (as of 2014), the country has the following indicators:
- Uzbekistan's GDP is $63.13 billion.
- Gross domestic product growth - 7%.
- Uzbekistan's GDP per capita is 1749.47 USD.
- GDP by sector: agriculture 18.5%, industry 32%, services 49.5%.
- External debt - 8.571 billion US dollars.
Economic review
Uzbekistan is one of the leading producers andcotton exporters, although the importance of this commodity has diminished since independence. The state also hosts the largest gold mine in the world. Uzbekistan is rich in natural resources: there are significant reserves of coal, strategic minerals, gas and oil. The main industries are textile, food, engineering, metallurgy, mining and chemical.
Dynamics of Uzbekistan's GDP
The country's gross domestic product in 2015 amounted to 66.73 billion dollars. USA. This is only 0.11% of global GDP. Over the past ten years, this indicator has shown steady growth. If we consider the GDP of Uzbekistan by years, then on average it amounted to 24.39 billion dollars. USA for the period from 1990 to 2015. The maximum was reached last year. The minimum value of Uzbekistan's GDP for this period was recorded in 2002 - 9.69 billion dollars. USA.
In the first half of 2016, the growth rate was 7.8%. This is 0.2% less than in the same period last year. All sectors of the economy developed at a slower pace than in 2015. The growth of industry this year amounted to 7.2%, the service sector - 12.4%, construction - 15%, agriculture - 6.4%, retail trade - 14.2%. Thus, it is clear that the pace of economic development is beginning to slow down, which makes the problem of structural reforms even more acute. On average, over the past ten years, GDP has grown by 8.03% per year. The maximum was reached in 2007 - by 9.8%. The minimum increase was recorded in 2006 - only 3.6%.
Despite the fact that the economy of Uzbekistan is rather closed, it managed to ensure a constant increase in GDP due to the reserves of natural resources available in the territory, in particular, oil, gas and gold. Cash receipts from their extraction and sale help the authorities control the national economy through investment in services and industry. Today, Uzbekistan is the fifth largest cotton producer. However, the state is seeking to diversify its agriculture towards fruits and vegetables.
Uzbekistan: GDP per capita
Last year was a record year in terms of many indicators. In 2015, the maximum per capita GDP of Uzbekistan was recorded. It amounted to 1856, 72 dollars. USA. This is 15% of the global average. The minimum value of GDP per capita was recorded in 1996 - 726.58 dollars. USA.
National strategy
The continuation of the recession in Russia, the decrease in the growth of China's gross domestic product and the fall in prices for gas, coal and cotton, which are the main export commodities, have caused a slowdown in the development of the national economy. In order to ensure the growth of Uzbekistan's GDP, the authorities used additional fiscal measures, in particular, increased government spending and lowered the level of taxation.
In April 2015, the privatization program was announced. In the first half of 2016, about 305 enterprises were sold to citizens of Uzbekistan. Foreign investorsreceived only minor stakes in 30 companies. The main problems of the Uzbek economy remain the weak diversification of foreign trade and the slow implementation of market mechanisms.
Foreign trade
The volume of exports in 2014 amounted to 13.32 billion US dollars. The main partners of Uzbekistan were the following countries: Switzerland, China, Kazakhstan, Turkey, Russia, Bangladesh. Fuel, cotton, gold, mineral fertilizers, ferrous and non-ferrous metal ores, food products, equipment and cars were exported.
The volume of imports in 2014 amounted to 12.5 billion US dollars. The main partners of Uzbekistan were such countries as China, Russia, Republic of Korea, Kazakhstan, Turkey, Germany. Among the imported goods, the largest share belongs to machinery and equipment, food industry products, chemicals, ferrous and non-ferrous ores.
Preliminary statistics show that exports increased in the first half of 2016. The volume of transfers and imports, on the contrary, decreased. This is due to less consumption by the private sector of durable goods and non-food products. The import-substitution program for fuels and chemicals also contributed.
Interaction with international organizations
Currently, 16 World Bank projects are being implemented in Uzbekistan. Interaction with the organization is built around the goal of achieving the status of an economy with an income higher thanaverage until 2030. Gross domestic product over this period should increase significantly, not due to the sale of natural resources, but due to the successful implementation of structural reforms. All projects are aimed at increasing the competitiveness of the national economy of Uzbekistan, improving the business climate and developing infrastructure for the rapid creation of jobs. There are three main areas of interaction with the World Bank. These are the development of the private sector, increasing the competitiveness of agriculture and the modernization of cotton production, as well as improving the system of public service provision.
