Page 27 - Uzbekistan rising bne IntelliNews special report

bne December 2021 Special Report: Uzbekistan Rising I 27
INTERVIEW:
Bootstrapping Uzbekistan’s finances
Odilbek Isakov,
the deputy Finance Minister of Uzbekistan
to 0.8% in 2018 but jumped again to 2.6% in 2019, 2.9% in 2020 and it was over 3% for the first nine months of
this year,” Odilbek Isakov, the deputy Finance Minister of Uzbekistan, told bne IntelliNews in an exclusive interview. “And that is not including some of the money spent on reconstruction and additional social support spending. That has driven the debt up.”
“Lower policy-based lending
and higher tax revenues from a rebounding economy offset higher budget spending on social support, health and public infrastructure.”
“We have run a budget deficit for
the last few years and it has grown more and more as expenditure was needed to support society: social spending, schools, hospitals, salaries, etc. Spending has gone up many times in the last few years.” he said.
“Though the deficit was financed through an increase in public
debt, robust nominal GDP growth contributed to a slightly lower ratio of public debt to GDP of 38.5% of GDP in the first half of the, compared with 38.9% at end-2020,” the World Bank said in its last assessment.
Much of the new spending next year will be financed by debt as well. The country's public debt in the first half of this year
Ben Aris in Tashkent
U
the pandemic recedes the economy is bouncing back. Since Uzbek President Shavkat Mirziyoyev took over in 2016 growth has soared to over 6% a year, but during 2020 it fell to 1.7% as the lockdowns disrupted supply chains and hurt commerce. But in 2021 the economy staged a comeback and growth has returned to 6.2% in the first half of the year. The World Bank upped its GDP forecast for the full year to 6.2% in October from 4.1% previously, and to 5.8% in 2022.
Growth is already strong but the country has meagre domestic resources and
has reached out to the international financial institutions (IFIs) and international investors to help it bootstrap its economy. The government is pouring money into investment
zbekistan was one of only two major economies in the world to
avoid recession last year and as
projects and spending heavily on social programmes, but the focus is not simply to make its people feel a bit richer; the focus is to invest into human capital
and infrastructure so that its growth becomes self-sustaining and sustainable.
Deficit and debt
The budget deficit has also been growing fast, as the government had to cope with the economic shock of the coronacrisis and the financial demands of transformation.
“There has been a budget deficit since 2017, when it was 1.9% of GDP. It fell
“We have run a budget deficit for the last few years and it has grown more and more as expenditure was needed to support society”
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