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Uzbekistan achieves dynamic economic growth, overcomes crisis – IMF

November 16, 2011, 20:34 UTC+3

The International Monetary Fund is ready to render assistance to Uzbekistan

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TASHKENT, November 16 (Itar-Tass) —— The International Monetary Fund is ready to render assistance to Uzbekistan, which has achieved a dynamic economic growth and overcame the global financial crisis successfully, said the IMF’s statement.

The document was compiled upon results of the IMF mission led by Deputy Division Chief in the IMF Middle East and Central Asia Department Veronica Bacalu, who visited Tashkent on November 2-15, 2011.

Proceeding from the statement, “Uzbekistan has achieved robust growth since the mid-2000s and has withstood the global financial crisis well.”

“At 8.5 percent on average over the last five years, Uzbekistan’s growth is higher than the average growth in Central Asia. Fiscal surpluses registered over the past years, high official reserves, low public debt, a stable banking system, and prudent borrowing from international financial markets have shielded the country from the direct impact of the global crisis,” the IMF experts wrote in their report.

According to the IMF representatives, who made the visit to Uzbekistan, “GDP growth was reported at 8.5 percent in 2010 and is at 8.2 percent through September 2011; and inflation has increased somewhat in recent months.”

“Strong growth was registered in services, transport and communication, trade, and agriculture and was driven by buoyant domestic consumption supported by large wage and pension increases. Investment has also continued, led by government’s industrialization program and supported by higher foreign direct investment,” the experts wrote in the document.

Besides they stressed: “The mission expects GDP to grow by 8.3 percent in 2011 with strong economic growth projected to continue over the medium term. Growth will continue to be supported by government’s policies to boost domestic consumption and investment and high commodity prices (projected to stabilize around current levels) for the Uzbek exports. External and fiscal positions are expected to stay strong.”

The members of the IMF mission stressed in their statement: “Important initiatives were undertaken in 2011 to support small businesses and facilitate private sector development. The authorities have initiated commendable measures, including streamlining access to bank financing, simplifying registration and issuance of permits, extending the moratorium on tax inspections for newly created small enterprises from 2 to 3 years; and simplifying customs certification procedures.”

At the same time, the mission believes that the main task of the Uzbekistani government in the short run “is the need to bring inflation down through effective macroeconomic and financial sector policies” and “further increase the real income per capita by raising productivity and ensuring sustainable and inclusive growth.”

“To this end, the mission welcomes the ongoing government programs to create new jobs for the young and growing population and continue strengthening social protection. In addition, the authorities of Uzbekistan have rightly embarked on a series of ambitious programs to modernize and diversify the economy, including exports, and increase the role of the private sector,” the document wrote, adding, “Moreover, substantial increases in bank capitalization contributed to the stability of the banking sector and are facilitating the authorities’ development programs.”

The experts of the IMF mission put forth their recommendations: “To succeed with these programs, the authorities should continue tightening monetary policy and pursue a more flexible exchange rate; undertake measures to further deepen financial sector intermediation; continue reforms, particularly in the exchange system, tax administration, public finance management and governance; and improve the quality and dissemination of data.”

The statement underlined that “The mission underscored that the Fund staff stands ready to assist Uzbekistan in its reform efforts, including through technical assistance.” At the conclusion the document stressed: “The mission is grateful for the excellent cooperation with the Uzbek authorities and the constructive discussions.”

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