Country Context



Population, million


GDP, current US$ billion


GDP per capita, current US$


Life Expectancy at Birth, years (2014)


Presidential elections were held in Uzbekistan on December 4, 2016, following the death of the former President, Islam Karimov. Shavkat Mirziyoyev, who was the Prime Minister of Uzbekistan from 2003 to 2016, won the presidential elections with 88.6% of the vote. 

Uzbekistan’s economy grew rapidly over the past decade and lifted significant parts of the population out of poverty. Today, the challenging external environment suggests that Uzbekistan will need to find new drivers for economic growth in the future. Increased exports of gas, gold, and copper, combined with high commodity prices, have generated revenues that have financed large increases in investment and salaries to bolster consumption. However, the commodity export volumes will likely plateau, and world prices are not expected to return to the levels of the past decade anytime soon. Uzbekistan’s reform agenda therefore needs to offset the downside risks and put the economy on a more sustainable path of income growth and job creation.

Uzbekistan’s GDP growth is expected to slow down only marginally in 2016, as the impact of lower commodity prices and the weak economic performance of the country’s largest trading partners are offset by the Government’s countercyclical fiscal and monetary policies. The current and the fiscal accounts remain positive. The migrants that have returned from Russia and the lower U.S. dollar remittances are nevertheless expected to put pressure on the labor market and to slow the pace of poverty reduction in the medium term.

In late 2015 and into early 2016, the Government of Uzbekistan adopted a number of development programs, including infrastructure, agriculture, industry development, and energy-efficiency programs, for 2015–19.It also announced measures to reduce administrative barriers to small businesses, established an export fund, introduced corporate governance standards for state-owned enterprises (SOEs), and announced a major privatization program to sell, by end-2016, stakes in the 1,247 SOEs and to support the diversification and private sector development agenda. Of these enterprises, about 305 were privatized in the first half of 2016 to Uzbek residents, while the minority shares in 30 Uzbek joint stock companies were sold to foreign investors.

Nevertheless, the pace and depth of structural economic reforms remain uncertain. The recently adopted sectoral development programs could indeed increase the economy’s potential, though these need to be complemented by ambitious structural reforms to address the country’s critical challenges in order to create jobs, improve economic efficiency and competitiveness, and foster a more inclusive growth. One of the key economic challenges faced by Uzbekistan is to adjust the country’s economic model; public policies and incentives are currently skewed toward the industrial policies that favor enterprises with state shares (SOEs) rather than private sector enterprises, as is the case in many high-performance developing countries. Current government policies are also weighted toward investments in mining and other industrial SOEs rather than in non-commodity production and in exports by private enterprises in manufacturing, agriculture, and services as engines of future growth.

Uzbekistan needs to unleash the potential of the private sector at the same time as it reduces the footprint of the very large and inefficient SOEs in the manufacturing, trade, and financial sectors. There needs to be a shift toward a business environment that is conducive to private investment that supports both vibrant small- and medium-sized enterprises (SMEs) with the potential to grow in number of employees and the larger private companies, which facilitate export performance and productivity improvements and can deliver the much-needed formal private sector employment with high-paying jobs. At the same time as addressing these imbalances in the country’s economic model, there is also a need to ensure the environmental sustainability and social inclusiveness of future growth.


World Bank Portfolio

Number of active projects



US$1893 million


4 loans (US$542.5 million)


10 credits (US$1287.9 million)


1 grant (US$12.7 million)


1 grant (US$49.90 million))

Note: South Karakalpakstan Water Resources Man-t Project has blended financing – IDA/IBRD

The World Bank Group’s (WBG) Country Partnership Framework (CPF) for FY2016–20 is aligned with the country’s own goal of achieving upper-middle-income status by 2030 by increasing the economy’s competitiveness, improving the business environment, and developing the infrastructure to support rapid job creation.

The new framework is underpinned by the Systematic Country Diagnostics (SCD) for Uzbekistan, the WBG’s comprehensive analysis of the economic conditions, challenges, and constraints that the country faces in the short and medium term in reducing poverty and achieving shared prosperity. Quality job creation emerged as a central, cross-cutting theme of the diagnostic.

The Partnership Framework for Uzbekistan focuses on three priority areas: private sector growth, agricultural competitiveness and cotton sector modernization, and improved public service delivery.

Over the next five-year period, the CPF program will remain flexible as circumstances change and new opportunities arise. Specific interventions would be determined based on their potential for job creation and/or their capacity to move the country forward in new arenas, such as finance and markets, trade and competitiveness, the private sector, privatization of SOEs, and SOE governance.

Key Engagement

Uzbekistan joined the World Bank in 1992. Since then, the Bank has provided commitments for 27 projects financed by the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA) and 30 grants provided under technical assistance programs.

Currently, 14 investment projects worth US$1.882 million are under implementation, with two Global Environment Facility (GEF) and Global Partnership for Education (GPE) grant-financed projects worth US$62.6 million.

Uzbekistan is one of the world’s major producers and exporters of natural gas, but it is also one of the world’s most energy-intensive economies. The country uses twice as much energy as its neighbor Kazakhstan to produce a unit of GDP, and six times as much as Germany. To improve its overall energy efficiency, Uzbekistan’s Government has developed a national strategy that includes cutting energy use per unit of GDP in half by 2030.

The World Bank joined with the Government’s efforts and piloted a new financial approach through its Energy Efficiency Facility for Industrial Enterprises Project. The Project, in liaison with three commercial banks, provides financing to strategic enterprises around the country in mining, chemicals, oil and gas, electric power, and the production of construction materials—the most energy-hungry industries—to upgrade old and outdated industrial equipment.

The Project is helping to save more than 539 million kWh of electricity and 252 million cubic meters of gas every year, an energy saving that is large enough to supply electricity for 850,000 families annually.

The first phase of the Project with US$25 million of IDA financing started in 2011 and was so successful that two years later, the Government of Uzbekistan and the World Bank agreed to US$100 million of Additional Financing for the Project. 


Recent Economic Developments

Continued recession in Russia—Uzbekistan’s second-largest trading partner and its primary source of remittances—slowing growth in China (Uzbekistan’s largest trading partner), and declining prices in Uzbekistan’s export commodities (natural gas, copper, and cotton) have all contributed to a slight reduction in Uzbekistan’s GDP growth in 2016. Growth slowed to 7.8% (y-o-y) in the first half of 2016 compared to 8.1% (y-o-y) in the same period in 2015. Private consumption remained weak, as income eroded due to persistently high inflation and a 19% (y-o-y) fall in remittances from Russia (as measured in U.S. dollar terms). By contrast, robust investment activity (discussed below), stimulated by some tax relief, supported growth.

In response to the poor external environment in 2016, the authorities introduced additional fiscal measures, including increases in social spending and public investment and cuts in business and citizen taxes. In April 2015, the Government announced a major privatization program to sell, by end-2016, stakes in 1,247 SOEs to generate public resources in 2015 and 2016 and support the diversification agenda. Of these enterprises, about 305 were privatized in the first half of 2016 to Uzbek residents, while the minority shares in 30 Uzbek joint stock companies were sold to foreign investors.

The central bank’s refinancing rate was maintained at 9% in January–September 2016 (i.e., slightly negative in real terms), helping total banking deposits to grow by 27% y-o-y in the first half of 2016, and total banking loans to grow by 26% y-o-y.

Preliminary official data suggest that total exports increased slightly in the first half of 2016, while remittance inflows and imports continued to decline. Lower imports were due to lower private consumption of durables and non-food consumer items and the further import-substitution of fuels and che­micals, as well as import compression measures, such as foreign currency rationing. All of these factors mitigated the pressures on the external accounts.

Although validation is not possible due to a lack of access to official micro data, the official poverty rate declined from 14.1% in 2013 to 13.7% in 2014 and an estimated 13.6% in 2015. Robust economic growth, micro- and small business development, and targeted government safety net programs have driven poverty reduction in the past. The distribution of income has become more equitable over time, and the official Gini coefficient fell from 0.39 in 2001 to 0.29 in 2013. However, the unemployment rate increased to 5.2% in 2015 from 4.9% a year earlier.

Economic Outlook

Uzbekistan’s positive outlook is predicated on significant investment growth and a gradual recovery of commodity prices, which are expected to edge out export revenues. Investment is projected to pick up as a result of improvements in the business environment for micro and small firms, as well as from a number of specific public investments in the energy and other infrastructure sectors as a result of newly adopted infrastructure, industry, and agriculture development programs. With only sluggish prospects for recovery in the external environment, GDP growth is projected to slow from 8% in 2015 to an average of 7.4% per year over the medium term.

Fiscal policy is expected to play a significant role in maintaining the rate of economic growth, as the implementation of Uzbekistan’s newly adopted industrial, agriculture, and infrastructure development programs proceeds and as tax relief is expected to shore up private consumption. The fiscal balance may recover modestly, but it will not reach pre-2015 rates. Monetary policy is also expected to be accommodative but somewhat more restrained than in previous years, with the aim of bringing about a gradual reduction in the inflation rate. With the Government’s emphasis on credit growth, the allocation of additional credit to SMEs is expected to facilitate the absorption of returning migrants into the labor market. Uzbekistan’s external account will improve modestly over time, as the Government continues its policy of tight foreign exchange controls in order to contain import growth. Demand from Russia and other trading partners is expected to remain weak, as are remittances.

Although data limitations do not allow for poverty projections, slow income growth and a large influx of returning migrants are expected to limit progress in reducing unemployment, poverty, and inequality over the near term. 

Adverse shocks to external trade and financial conditions, along with limited progress in implementing the market reform agenda, are the main risks to this outlook, impacting in particular net exports and private investment.

Highlighted Project

The World Bank continues to support the Government of Uzbekistan in improving public service delivery in the health, education, and water supply and sanitation sectors.

Health System Improvement Project

The World Bank has been working together with the Government of Uzbekistan to improve the country’s health system for more than 18 years. Engagement in the health sector started in 1998 with the approval of the Health-I Project, which focused on improving the quality and cost effectiveness of primary health care, particularly in rural areas, and on reforming the financing approach in the sector. The Health-II Project worked to complete the primary care program in the country and the institutionalization of general practitioners (GPs) nationally. The current Health System Improvement Project (Health-III) works at the secondary level of health care to improve access to quality health care at Rayon Medical Unions (RMUs) and selected City Medical Unions (CMUs) and to strengthen the Government’s public health response to the rise in noncommunicable diseases (NCDs).

The Project design is closely aligned with the National Investment Program objective of rehabilitating RMUs and CMUs and equipping them with up-to-date facilities and tools. Some Project highlights include:

  • Civil works have been completed in 60 out of 157 RMUs and four out of 15 CMUs. Further civil works are under way in 98 hospitals.
  • 201 medical facilities have received medical equipment.
  • 22 new treatment standards for NCDs have been developed and approved by the Ministry of Health.
  • 2,527 doctors have completed a 10-month GP training.
  • 579 doctors are currently enrolled in the training program.
  • 7,756 GPs and 21,557 nurses have completed continuous professional development courses.
  • The STEPs survey on NCD risk factors, the first in the country, was conducted.


Uzbekistan: Commitments by Fiscal Year (in millions of dollars)*

*Amounts include IBRD and IDA commitments