Page 15 - Uzbek Outlook 2024

Uzbekistan, Lebanon and Pakistan.
Some other foreign investors have invested in Uzbek startups. Examples include 500 Global (USA), Activat.VC (Kazakhstan), Caucasus Ventures (Azerbaijan), Quest Ventures (Singapore) and several Asian funds that have backed Iman.
Three major deals involving foreign investors were completed, or are pending completion, in 2023. In May TBC, the largest banking group in Georgia, fully acquired Payme, the leading digital payment provider in Uzbekistan, at a $113.6mn valuation. This was the first substantial startup exit in the country. In October, Uzum announced the involvement of unnamed “prominent international investors” in a $300mn investment plan – an unseen amount in Uzbekistan’s startup scene, which could thus see the emergence of its first unicorn.
The third deal involves Zood.biz, which is closing a round of around $50mn, its CEO Michael Khoi told bne IntelliNews. The money is provided by international and local investors such as Uzbek-Oman Investment Co. (UzOman).
6.0 Budget & Capital markets
6.1 Budget
In 2022 the government budget recorded a deficit of 4.2% of GDP, a small improvement on the 4.6% gap posted in 2021. However, in the first half of 2023 the situation deteriorated, as the deficit widened to 6.17% of GDP. International reserves stood at $33.7bn (€31.9bn) in July 2023, down 5.7% from the beginning of the year, but still high enough to ensure adequate fiscal buffers and cover around 11 months of imports, according to Fitch Ratings.
But development banks are impressed with the government’s open attitude to working with business to streamline the system.
Responding to business community demands, from October 2023 the tax authorities will discontinue the practice of applying the “tax gap” coefficient for VAT refunds. This significantly reduces the room for corrupt practices in tax-refund calculations. The government is also set to implement a transparent entrepreneurial ranking system. Businesses that achieve higher rankings will be eligible for tax exemptions and expedited processing of their VAT refunds, with the turnaround time reduced to a single day.
Uzbekistan's FinMin has presented a draft fiscal framework for 2024 with a headline deficit of 4% of GDP, or UZS52.5 trillion.
This estimate is based on the consolidated revenues and expenditure of the republican budget, the country's development fund and 18 extra-budgetary funds. It will arguably end up being lower than the actual deficit in 2023, which is expected to reach at least 5% of GDP. At the same time, the original 2023 framework was based on a 3% headline deficit.
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