Growth remained robust at 8.0% in 2013, led by wage and pension increases, high public investment spending, and large remittances. Recovery in external demand raised the current account surplus to 3.7% of gross domestic product (GDP). Continued high public spending, strong private consumption, and an improving external environment are projected to keep growth near 8.0% in 2014 and 2015.

Economic performance

GDP grew by 8.0%, down slightly from 8.2% in 2012, but making 2013 the seventh consecutive year of growth at 8.0% or better. On the supply side, the main contributors to growth were industry including construction, which expanded by 9.0% (up from 8.0% in 2012) and services at 8.8% (down from 10.4%). In industry, the ongoing modernization program, backed by substantial public investment and recovering external demand, boosted the production of machinery, textiles, construction materials, and foodstuffs. Services posted healthy growth as retail trade, telecommunications, finance, and catering all recorded double-digit increases. The continuing housing boom raised construction growth to 16.6% from 11.5% in 2012. Agriculture grew by 6.8% (versus 7.0% in 2012), supported by favorable weather and record harvests of the key cereal and vegetable crops.

On the demand side, wage and pension increases and substantial remittance inflows boosted private consumption, while net exports also increased. The government raised public sector wages and pensions by 21% in 2013 and maintained large-scale public investment in industry and housing. State investment spending grew by 11.0% to $11.3 billion, enabling gross fixed capital formation to rise by 19.8%, following 11.1% growth in 2012. An increasing share of investment is financed by the Fund for Reconstruction and Development (FRD), a sovereign wealth fund with assets exceeding $15 billion.

Selected Economic Indicators (%) - Uzbekistan 2014 2015
GDP Growth 8.0 7.8
Inflation 11.0 10.0
Current Account Balance (share of GDP) 4.7 3.6

Source: ADB estimates.

Economic prospects

Higher government spending and private consumption are projected to support growth at 8.0% in 2014 and 7.8% in 2015. Improvement in the external environment should raise demand for exports. On the supply side, investment-led industry and consumption-led services will remain the key drivers of growth. Planned wage and pension increases exceeding the inflation rate should, combined with remittances, boost private consumption and promote services. Agriculture is projected to grow by 6.5% each year, reflecting stable production in cotton and wheat.

The government will continue its large-scale investment program, which is set to conclude by 2015. Its aim is to increase industry’s share of GDP to 28% in 2015 from 24% in 2013.

Source: ADB. 2014. Asian Development Outlook 2014. Manila.