TASHKENT

Uzbekistan’s Central Bank has raised its growth forecast to 5.8-6.8 percent from a previous projection of 4.5-5.5 percent in 2021 as positive economic indicators in the first half of the year suggested the recovery is gathering pace.

The COVID-19 pandemic hit Uzbekistan’s economy sharply in the first half of 2020, but the recession was moderated by strong and timely containment and support measures implemented by the government, with the economy expanding 1.6 percent at the end of the last year.

The country’s gross domestic product (GDP) grew by 3 percent year-on-year in January-March this year, with industry increasing 3.8 percent year-on-year, agriculture 3.1 percent, services growing 2.8 percent and construction 0.5 percent.  Per capita GDP grew by 1 percent year-on-year to $353.4.

“According to the updated forecasts, the real GDP growth in 2021 will be 1.0-1.3 percent higher than the initial forecast that has been made in the first quarter and is expected to be in the range of 5.8-6.8 percent,” the central bank said in its Monetary Policy Review.

The review was based on the macroeconomic results for the first half of 2021 and the expected trends in external and internal economic conditions.

In the first half of 2021, real GDP growth was 6.2 percent year-on-year, the central bank said, adding that economic growth in most sectors had reached pre-pandemic levels.

However, the risks and uncertainties due to the COVID-19 pandemic can still have an impact on the economy of the country as a whole, the central bank said.

The annual inflation forecast for 2021 remains unchanged at 9-10 percent.

In May, the Asian Development Bank (ADB) said that the economic growth in Uzbekistan was projected to rebound to 4.0 percent in 2021 and 5.0 percent in 2022, driven by a broad recovery in the industry, services, and investment, though risks to growth persist from a protracted pandemic and uncertainty in the external sector.

Inflation is forecast to slow to 10.0 percent in 2021 and 9.0 percent in 2022, as the authorities are not expected to raise electricity or natural gas tariffs, the ADB said.

The bank said that electricity and natural gas stable tariffs should further slow inflation, while higher exports and steady remittances should trim the current account deficit. Uzbekistan needs to make its debt management more transparent and efficient.

In July, the ADB increased its economic growth forecast for the countries of Central Asia this year as the outlook for Kazakhstan improved. Uzbekistan’s economic growth projects remained unchanged.

The International Monetary Fund (IMF) expects Uzbekistan’s economy to grow by 5 percent in 2021, but says that the recovery could be delayed by a resurgence of infections, a slower-than-expected rollout of vaccines, or new containment measures, as well as slower growth in Uzbekistan’s main trading partners and fluctuations in commodity prices, notably the price of gold.