Page 16 - Uzbekistan rising bne IntelliNews special report

16 I Special Report: Uzbekistan Rising bne December 2021
Uzbekistan inflation y/y
Ipoteka bank to the Hungarian OTP. And Georgia’s TBC Bank has also entered the market, which is three times the size of its own domestic market back home.
The organisation of the energy market has already been transformed and with the help of the European Bank for Reconstruction and Development (EBRD) and other international financial institutions (IFIs) foreign investment has been attracted into modernising the existing facilities as well as building new renewable energy production capacity. In October the Uzbek government announced it is set to take its first corporate loan from the EBRD to invest into two wind farms.
All this costs money and the expansion of social support for the population, state investment in the development of rural infrastructure, as well as the costs of the vaccination campaign for the population and on the agenda and will further increase public spending by the end of the year. The World Bank has said these costs will be partially offset by higher tax revenues to the budget and revenues from mining
as well as revenues earned from the ongoing privatisation of SOEs.
Sustained economic recovery, gradual elimination of anti-crisis measures and tax administration reforms aimed at expanding the tax base are expected to help reduce the budget deficit and stabilise public debt at about 42% of GDP by the end of 2023, the World Bank says.
Source: Central bank of Uzbekistan
appliances, electronics, sports equipment, books, children's toys, and more.
Other international retailers to tap the Uzbek market last year included Russian discounter Fix Price, and Belarus’ Baraka Market, which plans to have 400 small supermarkets
in the country by the year-end.
Reforms driving growth
To maintain the country’s fast “catch up” growth the government needs
to stick to its frenetic reform agenda. Uzbekistan's GDP growth is forecast
to reach 6.2% in 2021, facilitated by
a recovery in domestic investment, international trade and remittances – all of which remain vulnerable to the risks of the coronavirus pandemic resurging.
The World Bank experts remain optimistic and expect the country's GDP growth rate to remain strong in 2022, reaching 5.6%, as the pace of vaccination of the population
accelerates and the disruptions in the global economy decrease.
But the biggest difference can be made by the ongoing reforms and investments they attract. Despite being in office
for five years, the country has barely left square one in the president’s effort to transform it into a modern market economy. The World Bank says that
it expects foreign direct investment (FDI) to stay at a low level this year, but it will partially recover next year.
In the meantime, the state is pushing ahead with its privatisation programme and restructuring of the state-owned enterprises (SOEs) to bring in more investment.
The banking and energy sector reforms are the most advanced and in a sign
of things to come, both have already attracted significant foreign investment. Two banks have already been sold, the most recent being mortgage specialist
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