Despite a generally subdued performance in the developing Europe and Central Asia (ECA) region, Uzbekistan’s economy continues to grow at significant rates. Economic performance has been supported over several years by a large fiscal stimulus that was prompted by the worsening external environment.
Despite the external environment, the outlook for Uzbekistan remains positive – based on a continuation of counter cyclical policies, a bottoming out of commodity prices and a gradual deepening of the reform agenda. Uzbekistan’s external environment is expected to stabilize or recover moderately in the medium term as commodity prices gradually pick up and the Russian economy recovers from the recession of 2015-16. However, the external environment in 2016-20 is not expected to be as advantageous as during the boom commodity years.
Uzbekistan, with the goal of becoming an industrialized, upper-middle-income country by 2030, is continuing to make transition steps towards a more market-oriented economy. The government’s aim is to ensure equitable distribution of the benefits of economic growth between provinces and across population groups and to continuously improve infrastructure and social services. These plans require per capita GDP growth averaging 5.5 percent annually in 2016-18, based on the creation of more good jobs.
The Uzbekistan Strategic Program of Actions for 2016 and subsequent years establishes the following objectives: increase the economy’s competitiveness; provide more freedom for private sector development; reduce government involvement in the economy; strengthen corporate governance of state-owned enterprises; increase manufacturing production; strengthen infrastructure; and create conditions for rapid job creation. The Program of Actions recognizes that its implementation will be the biggest challenge and will require major changes in economic governance.