Uzbekistan’s strong economic foundation

May 29, 2019

Uzbekistan has plentiful natural resources, with large reserves of gold, copper and hydrocarbons, and enjoys favourable climate conditions for agriculture production

The country has large FX reserves, equal to more than 60% of GDP and covering 20 months worth of imports at the end of 2017, and government debt-to-GDP is low, currently around 25%, and total external debt less than 50% of GDP Moreover, there is limited use of financial institutions at the moment on a corporate and consumer level, which presents an opportunity for increased leverage within the economy

Uzbekistan is strategically located at the heart of Central Asia, bordering all the other ‘stans and at the centre of China’s Belt and Road Initiative investment

If successful, Uzbekistan would follow in the footsteps of economies in East Asia that capitalised on similar demographic windows of opportunity in the past

IMF 2018 Article IV Consultation

Uzbekistan’s demographics offer both a plentiful supply of cheap labour and a growing consumer population. With 32 million people it is the largest population in Central Asia (CIA Factbook), of whom 50% are below the age of 25 and education rates are high, with literacy levels close to 100% (UNESCO Institute of Statistics)

Combined with this the economy is forecast to grow rapidly from a low base: GDP-per-capita in 2018 was only $1,262, compared to over $4,000 in Georgia and $9,000 in Kazakhstan (IMF) and GDP growth is forecast to be more than 5% through 2024, nearly doubling GDP per capita to $2,223 (IMF).

Favourable demographics and high economic growth, together with the ongoing reforms, present unique opportunities for private sector businesses to meet growing domestic demand and target export opportunities regionally and further afield

The combination of demographics and low GDP base is comparable with East Asian economies that underwent similar transitions and subsequent extended periods of economic growth.