Higher Investment Sustains Uzbekistan’s Growth Momentum in 2023 — ADB

TASHKENT — The Asian Development Bank (ADB) has raised its growth forecast for Uzbekistan for 2023 and 2024 after economic growth in the first half of 2023 outpaced expectations due to higher investment and strong expansion in industry.

The Asian Development Outlook (ADO) September 2023, an update to ADB’s flagship economic publication, projects a 5.5% growth for Uzbekistan’s gross domestic product (GDP), slightly higher than the 5% forecast in April. Growth in industry surpassed expectations in the first half of the year, accelerating from 4.6% to 5.6%, with modest gains in manufacturing and mining. The growth forecast for 2024 was also raised to 5.5% from 5% in April.

“Despite the risks posed by food and energy inflation coupled with a decrease in remittance inflows, GDP growth is expected to remain strong in 2023,” said ADB Country Director for Uzbekistan Kanokpan Lao-Araya. “Steady growth in industry, agriculture, and capital investment is anticipated to yield higher growth in the rest of 2023 and 2024”.

Consumption growth is expected to slow as persistently high inflation trims real household income and demand, despite rising wages and pensions. Exemptions from tax and customs duties on essential foodstuffs will continue until the end of 2023, helping to moderate the rise in food prices. Inward money transfers decreased significantly due to a decline in the number of Uzbek seasonal migrant workers in the Russian Federation, resulting in a wider current account deficit.

While sustained growth is favorable for achieving Uzbekistan’s goal of becoming an upper middle-income country by 2030, ADB calls for accelerating the transition to a green economy. Industrial expansion, especially with mining and quarrying output growth, should be concomitant with more robust climate and green transition actions by state-owned enterprises (SOEs). ADB will continue its policy dialogue with Uzbekistan to adopt environmental, social, and governance principles in corporate management of major SOEs and banks.

Uzbekistan joined ADB in 1995. Since then, ADB has committed loans, grants, and technical assistance amounting to $11 billion to the country.

ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.