Development of the economy of Uzbekistan in the first quarter of 2022
Tashkent, Uzbekistan (UzDaily.com) -- According to the Center for Economic Research and Reforms, in the first quarter of 2022, the economy of Uzbekistan came under increased pressure from the external environment: instability in the countries - the main trading partners, increased volatility in the global commodity market, disruption of supply chains.
Meanwhile, the economy of Uzbekistan in the first three months has demonstrated not only resistance to large-scale external challenges, but also a positive growth trend. According to the State Statistics Committee of the Republic of Uzbekistan, the gross domestic product (GDP) of Uzbekistan increased by 5.8% in January-March against an increase of 2.6% in the first quarter of 2021.
The economic situation in the countries - the main trading partners remained generally stable in the first months of this year. In Kyrgyzstan, in January-March, the economy grew by 4.5%, against a decline of 9% over the same period in 2021. In Kazakhstan, despite the shocks in January, there is economic growth of 4.4%, while in the first three months of last year there was a decline of 1.4%. China’s GDP for the period under review grew by 4.8% with acceleration by 1.3% by the 4th quarter of 2021. It is still difficult to judge the Russian economy, as there are no official statistics for three months. Meanwhile, VEB estimated Russia’s GDP growth in January-February at 3.6%. At the same time, the events of March are expected to have a serious impact on the economic indicators of the first quarter and the year as a whole. The economic turmoil in March associated with the Russian-Ukrainian conflict is likely to begin to affect the economic performance of Central Asian countries in the coming months.
According to the results of the first quarter, inflation in Uzbekistan slightly accelerated against the background of external shocks. In the first three months, the consumer price index increased by 2.9% compared to December last year (for the first quarter of 2021 - 2.5%). The acceleration of price growth is noted for food products - by 4.4%, against 3.1% in the first three months of 2021, as well as for non-food products - by 2.1% against 1.7%. Prices for services, on the contrary, showed a slowdown in growth to 1.5% (in January-March 2021, the growth in prices for services was 2.7%).
Investments in fixed capital in the first three months of this year increased sharply by 26% against the backdrop of recessions and sluggish growth in the previous 2 years. There are increased dynamics in non-centralized investments - an increase of 34%. In particular, the volume of attracted foreign direct investment (FDI) and investment through foreign loans increased by more than 1.5 times. Direct FDI increased 1.7 times. A double-digit growth of 30% is also noted for investments at the expense of enterprises.
Centralized investment, by contrast, declined by almost 30%. In particular, investments due to foreign loans guaranteed by the government decreased by almost 40%. Also, budget investments were reduced by 5%. Thus, in the first quarter, the share of centralized investments in total investment decreased from 12% in January-March 2021 to 6.9%, non-centralized, respectively, increased from 88% to 93%.
For the first three months in all sectors of the economy there is an increase in production.
Industrial production grew by 5.7%. The largest increase is observed in the sector of electricity, gas supply, steam and air conditioning by 16%. In the manufacturing industry, the leading industrial sector of the country, there is an outstripping dynamic - the volume of production increased by 5.9% (in January-March 2021 by 4.6%). The mining sector showed a slight increase in production by 0.8%.
The services sector shows double-digit growth rates over the three months. The output of market services increased by 16%. Growth is observed in all service sectors, except for education, where output decreased by 5%, and rental services - a decrease of 4.3%. Significant positive dynamics is observed in the financial sector - growth in January-March by 37.6%, in the field of ICT - by 27.8%.
The volume of services in the transport sector increased by 11.6%. Freight turnover increased by 2.7%, passenger turnover - by 8.3% (in January-March 2021, there was a decline of almost 4%). The acceleration of dynamics is also noted in terms of retail trade - by 10.8%, against a modest 2.7% for the same period in 2021.
In the construction sector, compared to the first three months of 2021, growth dynamics also accelerated from 3.8 to 6.3%
In agriculture, the growth rate slowed down somewhat to 2.8% (in January-March 2021, an increase in output by 3.1% was recorded). Crop and livestock production increased by 2.9%. In fish farming, growth slowed from 6.3% in the first quarter of 2021 to 2.1%. In forestry, on the contrary, there is an outstripping growth - 1.9% (in January-March 2021 - 1.6%).
According to the results of three months, there is a significant increase in the volume of foreign trade of Uzbekistan in comparison with the same period last year. Foreign trade turnover increased by 1.7 times and amounted to 7.5 billion dollars. Exports increased by 2, 4 times to 5.8 billion dollars, imports - by 45% to 7.4 billion dollars.
Such a sharp increase in exports is due to an increase in the sale of gold abroad, which was not observed in the first quarter of 2021. However, exports excluding gold also showed an increase by 16% compared to January-March last year. In addition, exports of industrial goods increased by 20% ($1.1 billion), services by 21% ($568 million), food products by 23% ($281 million), finished goods by 23% ( 212 million dollars), mineral fuels, oils and similar products by 32% (144 million dollars). At the same time, there is a decrease in the volume of exports of non-food raw materials by 22%.
In imports, the main increase was due to an increase in the supply of machinery and equipment by 64% (2.6 billion dollars), industrial goods by 51% (1.4 billion dollars). Also, imports of food products and live animals increased significantly by almost 60% (804 million dollars), services by 46% (530 million dollars).
Thus, in the first quarter of 2022, the economy of Uzbekistan continued its sustainable development, despite the continued increased turbulence of the global economy. The difficult situation in the world commodity markets and in the economies of major trading partners has already reflected in the acceleration of price growth in the country and is expected to continue to have a negative impact in the coming months.
Meanwhile, in all sectors of the economy, there is an increase in production. Investment activity in the first quarter shows a desire to reach pre-pandemic levels. Exports are growing at double-digit rates, excluding gold exports. In addition, in order to overcome the crisis and counteract external shocks, the country has already announced measures to support the economy, which are expected to help maintain stable economic growth dynamics this year.