Economic growth rate of Uzbekistan is expected to accelerate to 5.5% this year and 6.0% in 2020 from last year’s 5.0% on the back of strong investment, the International Monetary Fund (IMF) said.

According to IMF mission chief Albert Jaeger, under President Shavkat Mirziyoyev Uzbekistan has embarked on market reforms. 

“Heavy spending in areas such as construction and equipment imports should soon boost growth,” Albert Jaeger says.

“Why do we think GDP growth is going to pick up? The main answer is investment,” he told at a briefing in Tashkent. “Imports of capital goods in 2018 increased to $7.5 billion, that’s $3 billion more than in the year before. That is a massive increase.”

Inflation is set to remain relatively high, Jaeger said, around 15%, as price liberalization continues.

Risks to the outlook include a drop in commodity prices and demand for Uzbek exports, as well as growth of credit, which reached 50% last year.

“It will be important that credit growth is contained going forward,” Jaeger said. “If it’s not contained, the risk is it will put pressure on inflation and push further the external deficit.”

Elevated credit growth could also overheat the economy and start a boom-bust cycle, Jaeger warned.

Uzbek central bank Governor Mamarizo Nurmuratov, commenting on Jaeger’s statement, told the same briefing that the bank and the government were discussing the idea of capping annual credit growth at 25%.