Republic of Uzbekistan: 2024 Article IV Consultation-Press Release; and Staff Report

The 2024 Article IV Consultation discusses that Uzbekistan’s growth momentum continues on the back of far-reaching structural reforms to liberalize its economy, favorable commodity prices, and notable increases in financial and income flows. Growth is expected to remain robust at 5.4 percent in 2024, despite the appropriate withdrawal of fiscal stimulus and slowing trading partner growth. In 2025, growth is projected to pick up to around 5½ percent. Needed increases in administered energy prices would temporarily raise inflation to 11.5 percent by end-2024. The government’s planned fiscal consolidation is appropriate and will help reduce inflation and imports while protecting the vulnerable. Further efforts are needed to broaden the tax base, modernize the tax system, improve the efficiency of public spending, and strengthen public financial management. Monetary policy should remain focused on reducing inflation to the central bank’s target and be tightened if energy price reforms spill over to core inflation and inflation expectations. Structural reforms should focus on reducing the state’s role in the economy, promoting women’s participation in the labor market, advancing decarbonization and climate adaptation initiatives, and enhancing governance and transparency, building on progress already made.