Uzbekistan’s GDP growth rate to make up 5.5% in 2019

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Tashkent, Uzbekistan (DNA) – Uzbekistan’s GDP growth rate will be 5.5% in 2019 compared with 5.1% in 2018, the press service of the Ministry of Finance of Uzbekistan said.

According to the agency, the nominal size of GDP will be 524 trillion soums or US$58.3 billion.

The growth is due to internal factors, namely a strong growth in domestic demand.

In 2019, domestic demand growth is supported by:

1) capital investments in the economy, which, according to forecasts, will increase by 28.6%, including:

– centralized state investments (state budget, Fund for Reconstruction and Development of the Republic of Uzbekistan, loans attracted by the Government and guaranteed by the Government) will amount to 52.3 trillion soums, which is 23% more than in 2018;

– the inflow of foreign direct investment is significantly increasing and will reach US$2.0-2.5 billion.

2) expansionary fiscal policy with a consolidated budget deficit of 1.3% of GDP (in 2018 – a surplus of 0.5% of GDP);

3) an increase in real household incomes (projected growth for 2019 – 8%) as a result of:

– a significant increase in wages in the public sector;

– reducing the tax burden on personal income to 12%;

– adjustments to total wages in the economy.

4) According to forecasts, lending to the economy will grow by 44.0% (50.2% in 2018).

At the same time, external conditions are expected to remain weak due to the slowdown in economic growth in some major trading partners, as well as due to lower world prices for some export goods.

On the supply side, growth will be supported by a significant increase in production in the construction sector (annual growth rate of 11.8%), industry (6.4%), services (6.1%) and agriculture (3.0%).

The annual inflation rate at the end of the period is projected at 15.5% (14.3% in 2018).

Starting from 2020, in order to curb inflation, measures will be taken to maintain lending growth at a level not exceeding the nominal GDP growth rate.

The current account deficit is projected in the region of 6.5-7.0% compared to 7% in 2018;

Foreign trade turnover is projected at US$41.5 billion (an increase of 24.1% – US$33.4 billion in 2018) with exports of US$18.0 billion (+28.7%) and imports up to US$23.5 billion (+ 20.9%).

Gold and foreign exchange reserves are projected to reach US$27.7 billion (US$26.4 billion in 2018).

External public debt is expected to be in the range of US$15.0 billion or 25.8% of GDP (US$9.8 billion or 19.8% of GDP in 2018).

In the framework of the Law “On the State Budget of the Republic of Uzbekistan for 2020”, a limit has been established for the total amount of signed agreements on attracting external borrowing on behalf of the Republic of Uzbekistan (Government of the Republic of Uzbekistan) or under the guarantee of the Republic of Uzbekistan in the amount of US$4 billion.