Page 13 - Uzbek Outlook 2024

However, Fitch noted: “We believe the sales could be delayed due to ongoing pre-sale business model transformations being carried out with the help of IFIs, most notably the International Finance Corporation and the European Bank for Reconstruction and Development.”
It added that the aim of the transformations was to shift the banks from directed corporate lending towards commercial business, particularly in the SME and retail segments. “Despite recent progress, state-owned banks still have a corporate focus with material exposure to the public sector, resulting in vulnerabilities to certain sectors and borrowers. Many of the outstanding loans are at below-market rates, which weighs on banks’ profitability,” the ratings agency added.
5.3 Industry
Continued implementation of structural reforms is key to sustaining robust growth. The government has improved the transparency of public procurement, strengthened reporting and the management of SOEs and several state enterprises.
An increase in energy prices for businesses was implemented and the Law on Competition became effective in October 2023. Further reforms were announced in September and October 2023, including the creation of an independent energy regulator and the unbundling of the railway sector, and measures were adopted towards addressing climate change.
Nevertheless, additional measures are needed to increase energy prices to at least cost recovery levels, enhance governance and transparency (including for SOEs), further restructure and privatise state enterprises, and strengthen competition policies to reduce the state’s role in the economy.
Accelerating World Trade Organization negotiations and cooperating with neighbouring countries to improve transport routes will reduce transportation costs and open new markets for Uzbekistan’s products.
13 Uzbekistan Outlook 2021 www.intellinews.com