Page 9 - Uzbek Outlook 2022

3.2 External environment

Uzbekistan’s foreign trade has expanded significantly since incumbent Shavkat Mirziyoyev took office in
2016. Since the liberation of the FX market in 2017, companies have leapt at the chance to seal their own
export deals and trade is flourishing.

According to official data for January-October 2021, Uzbekistan’s foreign trade turnover got back on the
rails following the impacts of the first year of the pandemic, reaching $32.7bn, up 8.5% y/y.

Of the total trade volume, exports amounted to $12.4bn, (down 6.7%), while imports surged 20.5% to
reach $20.2bn.

Among the 20 major partner countries of Uzbekistan in foreign economic activity, active foreign trade
balances were observed with four countries—Afghanistan, Kyrgyzstan, Tajikistan and Turkey.

China remains Uzbekistan’s most important trade partner. However, turnover with the “ancient”
counterpart did not in 2021 regain pre-pandemic levels, whereas trade with the other Central Asian
republics and Turkey did surpass the levels seen in 2019.

To improve the balance of payments equation, Tashkent is investing in adding value to production.
Uzbekistan’s biggest export item is now textiles. That in itself is a reflection of the state’s new policy of
aggressively targeting value-added exports. A ban on raw cotton exports has forced cotton growers to
invest in textile production.

Accessions into the EU Generalised System of Preferences Plus (GSP+) scheme and its UK analogue
(Generalised System of Preferences Enhanced Framework) will yield trade gains in coming years as
tariffs are slashed.

If the country finalises its decision to join the World Trade Organisation (WTO), foreign trade figures can
be expected to skyrocket.

3.3 Inflation & monetary policy

The government forecasts that inflation will decline to 10% by the end of 2021, 9% in 2022 and 5% in
2023.

European Bank for Reconstruction and Development (EBRD) economist Eric Livny observed to bne

9 Uzbekistan Outlook 2022 www.intellinews.com