Uzbekistan’s economy continues to demonstrate stable growth despite increasing external uncertainty, according to a statement from the International Monetary Fund (IMF) mission following its 2025 consultation, reports Gazeta.uz.
According to the IMF, the country's real GDP growth in 2024 reached 6.5%, driven by strong domestic demand.
The current account deficit narrowed to 5% of GDP thanks to an increase in remittances, high commodity prices, growth in non-commodity exports, and a gradual decline in imports. International reserves remain at an adequate level.
In 2024, the consolidated state budget deficit fell to 3.2% of GDP, which the IMF attributes primarily to a reduction in energy sector subsidies and improved targeting of social spending.
At the same time, rising gold prices helped offset a decline in VAT revenues caused by a high level of tax refunds.
Despite the budget deficit reduction (i.e., the government’s efforts to spend less in order to “cool” domestic demand and curb inflation), public sector expenditures still grew when considering not just the central budget, but also state-owned enterprise spending.
In addition, external borrowing increased—the country took on more foreign debt, exceeding the set limit, which allowed state entities to continue spending despite the officially reduced deficit.
Although the budget deficit was formally reduced, the combination of increased borrowing and state enterprise spending kept total government expenditures high. This weakened the intended economic cooling effect.
Inflation, despite progress, remains elevated and stood at 10.3% year-on-year as of March 2025. This is largely due to last year’s hikes in energy tariffs and regulated prices.
Outlook for 2025–2026
Under its baseline scenario, the IMF forecasts continued steady economic growth at 5.9% in 2025 and 5.8% in 2026, despite growing global uncertainty.
The recently announced increase in global tariffs has intensified uncertainty and tightened global financial conditions, which may impact Uzbekistan’s economy through external demand, commodity prices, and financial flows.
Growth will be supported by private consumption, investment, and ongoing structural reforms.
The current account deficit is expected to remain at around 5% of GDP in 2025. Growth in gold exports and fiscal consolidation should offset a decline in non-gold exports due to slower growth among Uzbekistan’s trade partners.
Inflation is projected to decline to just above 8% by the end of 2025 and continue to decrease further.
CentralasianLIGHT.org
April 25, 2025