In its flagship annual economic publication, Asian Development Outlook (ADO) 2021, ADB projects gross domestic product (GDP) growth for Uzbekistan to be 4% in 2021 and 5% in 2022.

“While the pandemic and related restrictions slashed growth in Uzbekistan in 2020, growth is expected to rebound this year and next—but a timely vaccine rollout and strong containment measures remain critical for the country’s economic recovery,” said ADB Country Director for Uzbekistan Cindy Malvicini. “Uzbekistan must also look to improve how it assesses fiscal risks, particularly from state-owned enterprises, and mobilize private sector capital for public-private partnerships to strengthen the recovery and ensure sustainable, long-term growth.” 

Investments are expected to remain a major driver of growth rising on average by 9% in both 2021 and 2022, driven by the government’s efforts to upgrade industrial facilities and develop social and urban infrastructure. Private consumption is expected to grow by 7% as a result of higher wages and slowing inflation.

Inflation is projected to decelerate to 10% in 2021 and 9% in 2022 given that tariffs for electricity and natural gas are expected to remain stable. With inflation declining, the Central Bank keeps the policy rate at 14%. The monetary authorities are further expected to reduce lending at preferential rates, allowing market forces to determine all lending rates.

The report also calls for Uzbekistan to continue improving transparency around its external borrowing. Public communication of the government’s outstanding debt and contingent liabilities, as well as its terms, will help raise the public’s understanding of the government’s prudent debt management approach.