IMF forecasts Uzbekistan's GDP to increase to 5.5pct

By  Trend

The International Monetary Fund (IMF) forecasts GDP growth at 5.5 percent in Uzbekistan in 2019 due to the investment boom in the country, however, external demand for the main commodity exports may weaken, Trend reports with reference to the head of IMF mission Albert Eger.

In November 2018, the IMF predicted GDP growth at 5 percent in Uzbekistan in 2019.

"We expect growth rate of GDP to be 5.5 percent in 2019. The main reason is investment," Eger said at the press conference in Tashkent.

He states that the growth of Uzbek economy in 2020 will be 6 percent, which is also associated with investment demand.

The mission underlines that imports of investment goods of Uzbekistan rose from $4.5 billion in 2017 to $7.5 billion by the end of 2018.

"We see large investment projects, Tashkent city itself has turned into one big construction project," said Eger.

The IMF representative placed the weakening of external demand for the main export goods - gold, natural gas, non-ferrous metals among the short-term risks for Uzbek economy. "Their prices will be lower than today," said Eger.

The mission assessed that the inflation in Uzbekistan in 2019 will remain at last year’s level at 15 percent, after falling from 20 percent in 2017. In particular, the government and the Central Bank will need to take measures to curb the credit growth in the economy, which increased 1.5 times in 2018 and exerts inflationary pressure.

"Inflation is quite high, which is not surprising for a country with transitional economy that is pursuing liberalization and trying to bring prices to the level of self-sufficiency," Eger added.

In November, the IMF said that inflationary pressure on Uzbek economy in 2019 could increase, the consumer price index could reach 17-18 percent due to rising energy prices, wages in the social sector and taxes.

The Uzbek Central Bank stressed that the baseline inflation forecast in the country for 2019 is 13.5-15.5 percent compared to 17.5 percent in 2018. Official data demonstrated that inflation in Uzbekistan at the end of 2017 amounted to 14.4 percent compared to 5.7 percent in 2016, this growth in 2.5 times was associated with devaluation of the national currency - the soum - and liberalization of the country's foreign exchange market.