BAKU, Azerbaijan, Oct. 23
By Klavdiya Romakayeva - Trend:
Uzbekistan managed not only to preserve, but also to ensure the growth of its international reserves, Trend reports with reference to Renaissance Capital investment banking company.
Renaissance Capital called the reform program in Uzbekistan worthy, and also pointed to the availability of good resources, favorable demographic trends and political stability, should contribute to long-term sustainable growth.
The company also expects Uzbekistan to be the only country in the CIS region to maintain positive GDP growth of 1.5 percent at an annual rate in 2020.
Stable indicators of agriculture (more than a quarter of GDP) and industrial production, high prices and demand for gold helped the country to withstood two waves of quarantine during the coronavirus pandemic.
Analysts believe that a strong sell-off in gold, coupled with timely financial support from various development institutions and an impressively strong inflow of remittances, softened the depreciation of the soum, which weakened by only 9 percent.
“Uzbekistan managed not only to preserve, but also to ensure the growth of international reserves, which are enough for 20 months of imports,” analysts said.
It is expected that the budget deficit will widen to 5.8 percent of GDP in 2020 and then improve to 2.5 percent of GDP in 2022. It is also forecast that public debt will amount to 37 percent of GDP ($22 billion) by the end of 2020 and 35 percent of GDP in 2021-2022.
Renaissance Capital expects growth in Uzbekistan to recover to 5.6 percent as early as 2021 due to favorable demographic trends, a worthy reform program, constant inflows of investment from regional and Western partners, and solid domestic credit growth potential.
“Given its strong fiscal position, good growth prospects and low political risks, Uzbekistan to maintain its sovereign rating at 'BB-',” analysts added.
Renaissance Capital is a leading emerging and frontier markets investment bank providing access to over 50 markets across the globe with operations in Africa, Central and Eastern Europe, North America, and the Middle East.
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