IMF improves its outlook for Uzbekistan’s economy

The International Monetary Fund has changed its forecast for Uzbekistan’s GDP growth this year, according to the World Economic Outlook published in October 2022.  

This year the country’s economy is expected to increase by 5.2%, not 3.4% as projected by the fund in April. However, the IMF is not so optimistic when it comes to next year. The fund believes that Uzbekistan’s GDP will grow just by 4.7% while the earlier outlook was 5%. 

The IMF has also changed its forecast for inflation. In 2022, the price surge is expected at 11.2% instead of 11.8% while in 2023 the rate must be at 10.8% (11.3% by previous data). A modest inflation rate of 5.1% might be possible for Uzbekistan only by 2027, according to IMF experts. 

The World Economic Outlook survey which also covers other Central Asian states represents a different outlook as well. For instance, it is expected that the GDP will grow by 2.5% in Kazakhstan, 3.8% in Kyrgyzstan, 5.5% in Turkmenistan and 1.2% in Turkmenistan.

At the same time, the IMF is expecting world economic growth to slow down from 6% in 2021 to 3.2% in 2022 and 2.7% in 2023. This is the worst result since 2001 excluding the international financial crisis and the peak of the COVID-19 pandemic. 

«Global economic activity is experiencing a broad-based and sharper-than-expected slowdown, with inflation higher than seen in several decades. The cost-of-living crisis, tightening financial conditions in most regions, Russia’s invasion of Ukraine, and the lingering COVID-19 pandemic all weigh heavily on the outlook,» the survey said.

According to the fund’s experts, Monetary policy should stay the course to restore price stability, and fiscal policy should aim to alleviate the cost-of-living pressures while maintaining a sufficiently tight stance aligned with monetary policy. 

Earlier, the European Bank for Reconstruction and Development has also improved its forecast for Central Asia, which is going to increase by 4.3% this year and by 4.8% in 2023. However, the bank noted that almost all Central Asian countries are vulnerable to geopolitical tensions.