The International Monetary Fund Executive Board concluded the 2025 Article IV consultation with Uzbekistan, assessing that economic performance remains strong and the outlook broadly positive, but with persistent vulnerabilities linked to a large state footprint and elevated external uncertainty. The review underscored priorities to cement macro-financial stability and continue reforms that reduce the state’s role in the economy while supporting private sector-led, inclusive growth. Real GDP grew 6.5% in 2024 and 6.8% year on year in the first quarter of 2025, while inflation rose to 10.6% year on year in May 2024 following energy price reform and eased only marginally to 10.1% by end-April 2025. The current account deficit narrowed to about 5.0% of GDP in 2024 and the consolidated fiscal deficit to 3.2% of GDP, with international reserves remaining ample and projected at 9.2 months of imports by end-2026; baseline growth is projected at close to 6% in 2025-26. Executive Directors urged sustained fiscal discipline, including reversing the decline in the tax-to-GDP ratio, improving spending efficiency, adhering to external borrowing limits, and better monitoring fiscal risks from state-owned enterprises and public-private partnerships. On monetary and financial sector policies, they supported the Central Bank of Uzbekistan’s inflation objective and recommended a data-driven stance with further tightening if core inflation or expectations do not fall, stronger communication and transmission, greater exchange rate flexibility, implementation of outstanding safeguards recommendations on central bank governance and independence, and stronger banking supervision including improved asset classification, non-performing loan reporting and resolution, crisis management, and AML/CFT frameworks, alongside phasing out directed and preferential lending and accelerating privatization of state banks.

Original source View in tracker