IMF: Uzbek Economy on the Right Path
Reviews of the International Monetary Fund, which among other things monitors the global financial system, are perceived by the world community as a detached and reliable source of information on the financial and economic situation in member countries.
A regular presentation of the fund, devoted to the analysis of economies of the countries of Central Asia and the Caucasus, was held on November 9 in Tashkent.
The event, organized by the International Monetary Fund and the Central Bank of the Republic of Uzbekistan with the assistance from Orient Finans Bank, was attended by representatives of relevant ministries and agencies, banking and financial institutions, and the media.
According to the analyzes and forecasts voiced at the presentation made by the Deputy Director of the Department of the International Monetary Fund for the Middle East and Central Asia, Juha Kyahkonen, the growth of the world economy has been slowing down. The increase in prices for raw materials observed in recent years is a temporary phenomenon, and they will decrease in the future. For example, compared to previous years this year, prices for gold and other metals decreased by several percent.
Juha Kyahkonen added that the economies of the states of Central Asia and the Caucasus face numerous and interrelated risks. These are high prices for raw materials, tensions and restrictions in trade, difficult financial conditions. As a result, difficult issues appear on the monetary policy agenda, and fiscal risks increase. In particular, government debt is growing.
“So far, Uzbekistan is the only country in the region that, in economic development, does not depend on external factors and relies only on itself,” Kyahkonen said. “In your country, there is a process of economic transformation. That is, in the monetary policy, positive changes have been carried out, prices are being liberalized, the tax system has been reformed, entrepreneurial activity is supported, tax and customs privileges are provided to entrepreneurs. All this has a positive effect on the rate of economic growth in the country. For example, it is expected that the growth rate will increase this year by 5%, in 2019 - by 6%”.
In accordance with the conclusion of the International Monetary Fund, the states of Central Asia and the Caucasus have achieved positive results in inclusive economic growth, but to raise the standard of living at the current projected growth rate, the region will need another 20 years.
The efficiency of this process can be ensured by a fair fiscal policy, and the focus should be on improving public administration to generate highquality investments, increase human capital, develop the private sector, and enhance the effectiveness of reforms.
It was noted at the event that in comparison with other countries, the economic sphere is actively reforming in Uzbekistan. Readiness was expressed to support this process by the International Monetary Fund.
In monetary policy, the Central Bank of the Republic of Uzbekistan is moving in the right direction. Currently, the country has begun work on price liberalization. In such circumstances, there is the likelihood of accelerated growth in inflation. In this regard, the Central Bank is taking active measures to contain it. In particular, in September a decision was made to raise the refinancing rate.
As part of the presentation, the International Monetary Fund made recommendations to prevent inflation in our country.
“The recommendations on preventing a significant increase in budget expenditures and strengthening monetary policy are important,” said Deputy Chairman of the Central Bank of the Republic of Uzbekistan Ilhom Norkulov. “Our main task is to maintain a low level of inflation. However, price liberalization may be the reason for its growth. In this regard, in the conduct of monetary policy, we will tighten monetary conditions as much as possible and reduce inflation.