According to government sources, Uzbekistan’s gross domestic product (GDP) grew by 8.1% in the first half of 2014, up slightly from 8.0% in the same period of 2013. On the supply side, growth was driven by gains of 8.1% in industry and 14.2% in services, the latter reflecting strong performances in finance and telecommunications. Agriculture rose by 6.9%, as favorable weather contributed to a record grain harvest and higher fruit and vegetable output.
Investment was the main source of growth on the demand side, with gross fixed capital formation rising by 10.8% as the government continued implementing large development programs. Although the trade balance had moved into surplus by the end of the second quarter, lower global prices for cotton and gold, coupled with decelerating growth in such key trading partners as the Russian Federation, the People’s Republic of China, the Republic of Korea, and Ukraine, have begun to affect external demand. The possible further weakening of the already stagnating economy of the Russian Federation has raised additional risks to domestic consumption in the form of a projected fall in remittances. The deteriorating external environment prompts downward revisions in the growth forecasts for 2014 and 2015.
|Selected Economic Indicators (%) - Uzbekistan||2014||2015|
|ADO 2014||Update||ADO 2014||Update|
|Current Account Balance (share of GDP)||4.7||3.9||3.6||2.8|
Source: ADB estimates.
The government reported that average monthly inflation in the first quarter of 2014 was 0.9%, or 11.3% on an annualized basis, identical to consumer price index increases in the first quarter of 2011, 2012, and 2013. As trends in supply-and-demand factors of inflation have generally followed the scenarios projected in the Asian Development Outlook (ADO) 2014 in April, the earlier inflation forecasts are retained.
Unexpectedly weak trade performance in the first half of 2014 and slowing growth in Uzbekistan’s main trading partners call for a more conservative forecast for the current account balance. Thus, the current account surpluses projected for 2014 and 2015 are both reduced by 0.8 percentage points.
Source: ADB. 2014. Asian Development Outlook 2014 Update. Manila.