IMF: Uzbek Econ­omy on the Right Path

Uzbekistan Today (English) - - OPINION - Igor Ch­ernykh

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.

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