Uzbekistan has kept high GDP growth and balance of the public finances against the decline in foreign trade and inflation, according to March report of the Eurasian Development Bank (EDB) "CIS Makromonitoring".
In 2015, Uzbekistan economy has been exposed to negative effects of the deteriorating external situation. Growing by the end of the year turns of the decline in the world prices for raw materials (energy, metals, cotton, etc.), the deteriorating performance of the key trading partners (Russia, China, Europe), and the challenging geopolitical situation have had a direct negative impact on the volume of export and fiscal revenues.
As a result, dynamics of the key industries began to slow down, which was offset by continued strong growth in the other industries that have received stimulus from the government. According to the EDB, high growth has been continued in construction (17.8%), trade (15.1%), and agriculture (6.8%).
The turnover has decreased due to the critical deterioration of trade terms during the year, increased pressure on the nominal exchange rate of the national currency as a result of depreciation of trade partners’ currency.
The other main reason for the decrease in foreign trade is exports (minus 38%) in spite of the active policy of import substitution and export diversification. Reduction in oil index - minus 47% in annual terms, natural gas - by 28%, gold - by 8.3%, cotton - 15% has also had a significant influence.
In its turn, high GDP growth (8%), income growth, expansion of the tax base, use of the reserve funds, and consolidation of the government spending have contributed to preservation of public finance balance. All this has been despite the declining foreign trade and reducing the tax burden.
According to the EDB experts, Uzbekistan has made active use of income from energy resources export to promote localization of production, infrastructure development programs, as well as domestic consumption in the framework of the social policy aimed at creating jobs and raising incomes.