ADB improves economic growth forecasts for Uzbekistan for 2023

According to the September report of the Asian Development Outlook, the region’s GDP is expected to increase by 3.9% as a whole by the end of 2022, and by 4.2% next year. In April, the bank’s economists expected a rise of 3.6% and 4%, respectively.

The ADB forecast for the growth rate of the economy of Uzbekistan for the current year has not changed – 4%. In 2023, the bank expects it to accelerate to 5%, against 4.5% in the previous report.

According to official data, in the first half of the year, GDP increased by 5.4%, a quarter less than in the same period of 2021. There was a slowdown in industry to 5.1%, and in the services sector to 7.3%. On the other hand, growth in the construction industry accelerated sharply to 6.2%.

As the authors of the report noted, the negative impact of the conflict in Ukraine and economic turbulence in Russia on neighboring countries turned out to be less than expected. The volume of remittances has grown significantly, which was previously noted by the Central Bank.

The increased inflow of remittances will also reduce the balance of payments deficit. According to the Central Bank, in the first half of the year, the negative balance decreased by 6 times compared to last year – to 1.4% of GDP.

At the same time, uncertainty remains about the further effects of the current situation. Accelerated inflation will also hit the purchasing power of the population, ADB economists expect.

Annual growth in consumer prices at the end of June was 12%, with food prices rising the most. Against this background, consumption increased only by 4.3% (a year earlier – 7.1%).

ADB, like the Central Bank, expects inflation to remain near the current level by the end of the year. In 2023, a slight decrease is expected – to 11% (previously expected 8%).

The forecast for the economies of neighboring countries has also been improved – in Kyrgyzstan up to 3% (was 2%), and in Tajikistan up to 4% (2%). The exception was Kazakhstan, where the expected growth fell slightly to 3% this year and 3.7% going forward.