However, analysts note that the pace of growth may be affected by uncertainty associated with the pace of global economic recovery and the success of the national vaccination campaign against COVID-19.
A gradual recovery in trade and investment flows, remittances from labor migrants, a bountiful crop and vaccination of the population will contribute to economic recovery and stimulate further reductions in unemployment and poverty.
Higher GDP growth is projected in 2022 (up to 5.5%) as the pace of vaccination of the population accelerates and the disruptions in the global economy ease.
The current account deficit of the balance of payments is projected to widen to 5.5% of GDP in 2021 as the volume of imports of machinery, equipment and other industrial goods in the framework of large investment projects recovers.
Despite forecasts of a partial recovery in foreign direct investment volumes after their decline in 2020, public and private borrowing is expected to continue to finance most of the current account deficit of the balance of payments.
According to forecasts, a reduction in state budget revenues, the purchase of vaccines, an expansion of social support for the population and an increase in funding for socio-economic development programs and state lending to enterprises will increase the budget deficit to 5.4% of GDP in 2021. It will be financed mainly by increasing government borrowing.
Uzbekistan’s public debt is expected to reach 42% of GDP in 2021 and stabilize at about 45% of GDP over the medium term. As conditions improve for households and businesses, the gradual elimination of anti-crisis measures will lead to a reduction in the budget deficit in the medium term.