Asian Development Bank said on Tuesday, 16 September, that the economy of Uzbekistan will increase by 8% in 2008 and 2009. The bank published its Asian Development Outlook 2008 Update (ADP Update), which raises projected GDP growth for 2008 from 7.8% to 8.0% and for 2009 from 7.2% to 8.0%.
The main growth drivers in the first quarter of 2008 were a favorable external environment for commodity and non-commodity exports, acceleration in hydrocarbon-related foreign direct investment inflows, and strong remittance inflows from the Russian Federation, the report said. These drivers are expected to remain in place over the projection period, it added.
“Inflation is expected to moderate in 2008, with limited pass-through of higher world food prices, tight monetary and fiscal policies, and sterilization through accumulation of government deposits at the central bank. Price controls of basic food items and restrictions on some food exports have resulted in lower food inflation than elsewhere I the rest of the sub region,” the ADO Update said.
Fiscal tightening through scaling back public investment has helped offset the effects of exchange rate interventions to induce depreciation, but there is concern that this has been at the expense of public investments that could have helped improve public goods provision. Wage and salary increases will be a source of inflation pressures in 2008.
