Economic

situation in
Uzbekistan
Dilnozakhon Azimova 阿莫娃
2023722502
Table of contents

• Background
• National Income
• Money supply
• Inflation
 Background
Uzbekistan is located on the ancient Silk Road, occupying a strategic position at the
crossroads between Europe and Asia. Uzbekistan's economy is one of the most dynamically
developing in Central Asia: despite the COVID-19 pandemic, the country's GDP grew by
1.9% in 2020, followed by a rapid recovery to 7.4% in 2021, according to the State Statistics
Committee of the Republic of Uzbekistan. Uzbekistan, with a population of 35 million
people, is a large market for various goods and services, and also provides an opportunity to
enter the markets of the Commonwealth of Independent States (CIS) and neighboring
countries.

Uzbekistan has rich reserves of natural gas, gold, uranium, silver, copper and many other
minerals. This provides many investment opportunities and ensures the macroeconomic
stability of the country. The country has a young and skilled workforce and offers various tax
and customs benefits, as well as conditions for cost-effective investment and trade.

Since 2017, Uzbekistan has been experiencing a new accelerated stage of development -
large-scale political and economic reforms are being implemented in the country, which have
led to the creation of a more open, market-oriented economy and a more favorable investment
climate against the background of measures to privatize large state-owned enterprises.
Macroeconomic indicators

The forecast of Uzbekistan's economic development remains stable, as the

government continues the country's transition to a market-oriented
economy, increasing resource efficiency and creating a more competitive
and transparent business environment stimulated by the growth of the
private sector.

Uzbekistan's economy maintains strong fiscal and external buffers: public

debt is than 35% of GDP and $35 billion in gold and foreign exchange
reserves in 2023. The inflation rate decreased from 15.2% in 2019 to
8.7% in 2023 that was main achievement of the government according to
a plan of reducing annual inflation to 5% by 2023.
 National income

According to the law "On the State Budget of the Republic of Uzbekistan for 2024," the
country's budget is determined at 427.6 trillion soums. The country's GDP will grow by 5.6-
5.8% to 1.3 quadrillion soums. That's 1,300,000,000,000,000 soums, or $34.66 billion.
The budget of Uzbekistan has the following parts. The six largest sources (VAT + income from
trust funds + income tax + dividends + income from extrabudgetary organizations + non-tax
revenues) will give two-thirds of the income.

At the same time, the budget receives very high incomes under the articles "The Individual
Income Tax" - 4.3% and "Excise" - 4.7%. That is, the economy is more for its own population,
not for the export of raw materials. This forces the government to develop its own economy
and involve its fellow citizens in entrepreneurship.
Money Supply

A stable and adequately managed money supply is essential for

maintaining price stability and supporting economic growth. In
Uzbekistan, the central bank plays a crucial role in regulating the money
supply to ensure macroeconomic stability. Over the years, prudent
monetary policies have helped maintain a balance between liquidity
requirements and inflationary pressures. By implementing measures
such as open market operations and reserve requirements, the central
bank has effectively managed money supply dynamics, thereby
mitigating the risk of excessive inflation or deflation.
Money Supply
1.Central Bank Role: The Central Bank of Uzbekistan, known as the Central Bank of the Republic of
Uzbekistan (CBU), is responsible for regulating the money supply and implementing monetary
policy. The CBU uses various tools, such as reserve requirements, open market operations, and
interest rate adjustments, to control the availability of money in the economy.
2.Monetary Policy Measures: The Central Bank of Uzbekistan implements monetary policy
measures to manage money supply dynamics and achieve macroeconomic objectives, such as price
stability and sustainable economic growth. These measures include:
• Open Market Operations: Buying and selling government securities in the open market to adjust
the level of bank reserves and influence interest rates.
• Reserve Requirements: Setting minimum reserve ratios that banks must hold against their deposits
to control the amount of money they can lend.
• Interest Rate Policy: Adjusting key policy interest rates to influence borrowing and lending
behavior, inflation expectations, and overall economic activity.
 In 2023, the total amount of cash
receipts amounted to 669 trillion.
soums, and increased by 28 percent
compared to 2022.
There was also an increase in the share
of receipts through terminals in the
total amount of cash receipts compared
to 2022 from 34 percent to 38 percent,
and accordingly, the share of receipts
through terminals from the trade and
services sector increased from 37
percent to 40 percent.

The structure and dynamics of total cash receipts

In 2023, the volume of bank cash turnover amounted to 831
trillion soums, and increased by 19 percent compared to 2022.
In particular, cash flows to banks increased by 20 percent
compared to last year and amounted to 414 trillion soums. The
share of cash in the total money supply as of January 1, 2024
amounted to 21.5 percent, and decreased by 0.8 percentage points
compared to the previous period.
Inflation Inflation, consumer prices (annual %)

Annual inflation in Uzbekistan for 2023, according to official

data, was 8.77%. This is the minimum figure for the last five
years. At the same time, almost all goods and products have
risen in price.

According to the Statistics Agency, for the year, prices for

food and non-alcoholic beverages increased by 9.2%, for
clothing and footwear - by 6.2%, for alcohol and tobacco - by
10.4%, for housing and communal services - by 6.4%, for
health care - by 9.7%.

In particular, the price for meat products for the year

increased by 9.1%, for cereals - by 9.7%, for milk and eggs -
by 11.2%, for fish - by 7.7%, for fruits and nuts - by 37.1%,
for sugar and confectionery - by 9%.
It should be noted that the increase in prices and the level of inflation in Uzbekistan can lead to the
following consequences. The violation of the price balance will lead to the fact that not all enterprises
will be able to change the price policy equally quickly, macroeconomic stability will decrease,
subsequently this will lead to a fall of the national currency, and most importantly - to a change in
economic indicators.

Subsequently, all this will lead to a decrease in real incomes of the population. This will force the state
to raise wages, which will lead to an increase in state expenditures and an increase in prices, as well as a
change in the pace of production. Either the company will start producing more products to balance
supply and demand, or there will be demand inflation.

To solve these problems, President Shavkat Mirziyoyev in his Address to Parliament noted the main
tasks in the field of economy - ensuring macroeconomic stability, containing inflation,
demonopolization of industries, abolition of state price regulation and eradication of the "shadow
economy". He also stressed that one of the most important tasks remains to reduce inflation, so starting
this year, we have begun to introduce an inflation targeting system.
Thanks!