{
  "title": "IMF Executive Board Concludes 2021 Article IV Consultation with the Republic of Uzbekistan",
  "publication": "IMF News, April 23, 2021",
  "sourceUrl": "https://www.imf.org/en/news/articles/2021/04/23/pr21112-uzbekistan-imf-executive-board-concludes-2021-article-iv-consultation",
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  "summary": "The Executive Board concluded the Article IV consultation and endorsed the staff appraisal on a lapse-of-time basis.",
  "publishDate": "2021-04-23",
  "sections": [
    {
      "heading": "Executive summary and economic context",
      "content": "- The Executive Board concluded the Article IV consultation and endorsed the staff appraisal on a lapse-of-time basis.\n- Uzbekistan posted positive overall growth in 2020, at a rate of 1.6 percent, despite a sharp pandemic-driven contraction in the first half of 2020.\n- The pandemic's recession was moderated by strong containment and support measures, including fiscal, monetary, and financial measures, aided by substantial buffers from prior prudent macro-economic policies and sizable international support.\n- Inflation ended 2020 at just over 11 percent, with higher food price increases contributing to low double-digit inflation."
    },
    {
      "heading": "Near-term outlook and risks",
      "content": "- Growth projection for 2021: about 5 percent.\n- Current account deficit projected for 2021: about 6½ percent of GDP.\n- Inflation projected by end-2021: just below 10 percent (driven by food price pressures and government wage increases).\n- Key downside risks:\n  - Resurgence of infections or new variants.\n  - Slower-than-expected vaccine rollout.\n  - Slower growth in Uzbekistan’s main trading partners.\n  - Fluctuations in commodity prices, notably the price of gold.\n- If downside risks materialize, authorities could use fiscal buffers to provide additional, targeted support to households and businesses."
    },
    {
      "heading": "Executive Board assessment — main findings",
      "content": "- The COVID-19 pandemic’s adverse impact has been relatively short-lived, mitigated by timely policy responses.\n- Activity rebounded in the second half of 2020; Uzbekistan was among the few countries posting positive growth in 2020.\n- Uncertainty remains high; continued near-term support is needed with focus on protecting lives and livelihoods and securing enough vaccines.\n- Public debt has almost doubled in a few years’ time, though still at a relatively low level; risk of public debt distress is assessed to remain low if authorities ensure fiscal sustainability.\n- Banks’ loan portfolios may be affected with a lag; further improvements in the Central Bank of Uzbekistan (CBU)’s supervisory capabilities are needed to better monitor banks and respond to possible banking sector difficulties.\n- Incomes remain relatively low compared to other emerging economies, and the social safety net still leaves out many vulnerable households.\n- The pandemic slowed Uzbekistan’s transformation to a modern market economy and temporarily stalled income convergence."
    },
    {
      "heading": "Policy recommendations and priorities",
      "content": "- Fiscal policy:\n  - Maintain a gradual withdrawal of fiscal stimulus as the pandemic subsides.\n  - Adopt a set of fiscal rules and reduce the budget deficit in the coming years to place public debt on a downward path.\n  - Create fiscal space by improving revenue administration and spending efficiency to expand the social safety net and invest in healthcare and education.\n- Monetary policy and financial sector:\n  - Continue to focus monetary policy on lowering inflation.\n  - The CBU should continue to allow exchange rate flexibility.\n  - Strengthen the CBU’s supervisory capabilities for effective bank monitoring and response.\n- Structural reforms:\n  - Accelerate wide-ranging structural reforms to secure strong, sustainable, and inclusive growth.\n  - Reduce the role of the state in the economy and create an environment conducive to strong private sector growth.\n  - Build strong and independent institutions to ensure a well-functioning and fair market economy, enhance policy stability and predictability, and ensure adherence to the rule of law and government transparency.\n  - Increase digitalization to facilitate transparency and reform implementation.\n- Social protection:\n  - Expand the social safety net to protect vulnerable households, especially those currently excluded."
    },
    {
      "heading": "Selected economic indicators, 2018–22 (as presented)",
      "content": "- Real GDP growth (percent change)\n  - 2018: 5.4\n  - 2019: 5.8\n  - 2020: 1.6\n  - 2021 Est.: 5.0\n  - 2022 Proj.: 5.3\n- GDP per capita (in U.S. dollars)\n  - 2018: 1,543\n  - 2019: 1,736\n  - 2020: 1,702\n  - 2021 Est.: 1,780\n  - 2022 Proj.: 1,922\n- Population (in millions)\n  - 2018: 32.7\n  - 2019: 33.3\n  - 2020: 33.9\n  - 2021 Est.: 34.4\n  - 2022 Proj.: 35.0\n- Consumer price inflation (eop, Percent change)\n  - 2018: 14.3\n  - 2019: 15.2\n  - 2020: 11.1\n  - 2021 Est.: 9.8\n  - 2022 Proj.: 10.6\n- GDP deflator (Percent change)\n  - 2018: 27.5\n  - 2019: 18.6\n  - 2020: 11.9\n  - 2021 Est.: 11.5\n  - 2022 Proj.: 11.5\n- Current account balance (Percent of GDP)\n  - 2018: -7.1\n  - 2019: -5.8\n  - 2020: -5.4\n  - 2021 Est.: -6.4\n  - 2022 Proj.: -5.9\n- External debt (Percent of GDP)\n  - 2018: 34.3\n  - 2019: 43.9\n  - 2020: 58.4\n  - 2021 Est.: 62.3\n  - 2022 Proj.: 63.8\n- Exchange rate (in sums per U.S. dollar; eop)\n  - 2018: 8,340\n  - 2019: 9,516\n  - 2020: 10,477\n  - 2021: …\n- Real effective exchange rate (ave, 2015 =100, decline = depreciation)\n  - 2018: 60.6\n  - 2019: 64.5\n  - 2020: 64.6\n- Government finance (Percent of GDP)\n  - Budget revenues\n    - 2018: 28.7\n    - 2019: 27.6\n    - 2020: 27.7\n  - Budget expenditures\n    - 2018: 30.8\n    - 2019: 32.6\n    - 2020: 32.0\n    - 2021 Est.: 33.1\n    - 2022 Proj.: 31.6\n  - Budget balance\n    - 2018: -2.1\n    - 2019: -3.9\n    - 2020: -4.4\n    - 2021 Est.: -5.5\n    - 2022 Proj.: -4.0\n  - Consolidated revenues 1/\n    - 2018: 27.8\n    - 2019: 28.1\n    - 2020: 26.6\n    - 2021 Est.: 27.0\n    - 2022 Proj.: 27.0\n  - Consolidated expenditures 1/\n    - 2018: 26.0\n    - 2019: 28.3\n    - 2020: 29.9\n    - 2021 Est.: 30.1\n    - 2022 Proj.: 29.8\n  - Consolidated fiscal balance\n    - 2018: 1.7\n    - 2019: -0.3\n    - 2020: -3.3\n    - 2021 Est.: -3.5\n    - 2022 Proj.: -2.8\n- Policy-based lending (Percent of GDP)\n  - 2018: 3.9\n  - 2019: 3.7\n  - 2020: 1.2\n  - 2021 Est.: 2.0\n- Overall fiscal balance (Public debt, Percent of GDP)\n  - Public debt\n    - 2018: 20.3\n    - 2019: 29.3\n    - 2020: 37.8\n    - 2021 Est.: 42.1\n    - 2022 Proj.: 44.2\n- Money and credit (percent change or level reported)\n  - Reserve money\n    - 2018: -1.9\n    - 2019: 17.8\n    - 2020: 15.4\n    - 2021 Est.: 10.0\n    - 2022 Proj.: 12.1\n  - Broad money\n    - 2018: 13.2\n    - 2019: 13.8\n    - 2020: 17.9\n    - 2021 Est.: 15.7\n    - 2022 Proj.: 17.2\n  - Credit to the economy\n    - 2018: 51.3\n    - 2019: 23.8\n    - 2020: 19.7\n    - 2021 Est.: 17.6\n\nSource: Press Release No. 21/112, IMF Communications Department; April 23, 2021.\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- Republic of Uzbekistan and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2021/04/23/pr21112-uzbekistan-imf-executive-board-concludes-2021-article-iv-consultation"
    }
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    "Published: April 23, 2021",
    "The Executive Board concluded the Article IV consultation and endorsed the staff appraisal on a lapse-of-time basis.",
    "Uzbekistan posted positive overall growth in 2020, at a rate of 1.6 percent, despite a sharp pandemic-driven contraction in the first half of 2020.",
    "The pandemic's recession was moderated by strong containment and support measures, including fiscal, monetary, and financial measures, aided by substantial buffers from prior prudent macro-economic policies and sizable international support.",
    "Inflation ended 2020 at just over 11 percent, with higher food price increases contributing to low double-digit inflation.",
    "Growth projection for 2021: about 5 percent.",
    "Current account deficit projected for 2021: about 6½ percent of GDP.",
    "Inflation projected by end-2021: just below 10 percent (driven by food price pressures and government wage increases).",
    "Key downside risks:",
    "If downside risks materialize, authorities could use fiscal buffers to provide additional, targeted support to households and businesses.",
    "The COVID-19 pandemic’s adverse impact has been relatively short-lived, mitigated by timely policy responses.",
    "Activity rebounded in the second half of 2020; Uzbekistan was among the few countries posting positive growth in 2020.",
    "Uncertainty remains high; continued near-term support is needed with focus on protecting lives and livelihoods and securing enough vaccines.",
    "Public debt has almost doubled in a few years’ time, though still at a relatively low level; risk of public debt distress is assessed to remain low if authorities ensure fiscal sustainability.",
    "Banks’ loan portfolios may be affected with a lag; further improvements in the Central Bank of Uzbekistan (CBU)’s supervisory capabilities are needed to better monitor banks and respond to possible banking sector difficulties.",
    "Incomes remain relatively low compared to other emerging economies, and the social safety net still leaves out many vulnerable households.",
    "The pandemic slowed Uzbekistan’s transformation to a modern market economy and temporarily stalled income convergence.",
    "Fiscal policy:",
    "Monetary policy and financial sector:",
    "Structural reforms:",
    "Social protection:",
    "Real GDP growth (percent change)",
    "GDP per capita (in U.S. dollars)",
    "Population (in millions)",
    "Consumer price inflation (eop, Percent change)",
    "GDP deflator (Percent change)",
    "Current account balance (Percent of GDP)",
    "External debt (Percent of GDP)",
    "Exchange rate (in sums per U.S. dollar; eop)",
    "Real effective exchange rate (ave, 2015 =100, decline = depreciation)",
    "Government finance (Percent of GDP)",
    "Policy-based lending (Percent of GDP)",
    "Overall fiscal balance (Public debt, Percent of GDP)",
    "Money and credit (percent change or level reported)",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
    "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[Republic of Uzbekistan and the IMF](http://www.imf.org/external/country/UZB/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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