Outlook for 2011-12

• The Economist Intelligence Unit expects that the president, Islam Karimov, will retain a tight grip on power. Despite ostensible moves to give parliament a greater say, there is little prospect of democratisation.
• Mr Karimov's health is subject to question, and there are doubts over who will eventually succeed him, making for a highly uncertain outlook once he departs the political scene.
• Political links with the West will be closer over the forecast period than in the late 2000s, driven by the regional security agenda. However, political and economic ties with Russia and China will also remain strong.
• Real GDP growth will remain robust in 2011-12, owing to a solid performance in the Russian economy and broadly favourable export prices. We forecast officially reported annual average real GDP growth of just over 8.5%.
• Average annual inflation is forecast to remain high in 2011-12, at around 15%, owing to high global commodity prices. Government increases to state-sector wages and welfare benefits will lead to rapid money supply growth.
• The current-account surplus will reach 16% of GDP in 2011, before falling in 2012 as global prices for Uzbek commodity exports decline.

Monthly review

• In the first official pronouncement on the wave of unrest in the Middle East and North Africa (MENA), Mr Karimov claimed that the unrest is the result of foreign influences attempting to gain control of natural resources.
• A prominent political prisoner, Yusuf Jumaev, has been released from jail early and allowed to leave for the US.
• The black-market exchange rate has fallen by about 9% since October 2010 and is more than 40% below the official rate.
• The government is in dispute with the UK-owned Oxus Gold over a 50% stake in Amantaytau Goldfields (AGF).
• Despite a global climate of high food and commodity prices, official data report that inflation slowed in the first quarter of 2011, to 7%, from 7.3% in the previous quarter and 7.7% in the year-earlier period.
• Official statistics put exports of energy and fuel products at US$708m in the first quarter of 2011, still accounting for one-fifth of total exports, but falling by 10% in value terms compared with year-earlier period.
• Natural gas extraction was 16.7bn cu metres in the first quarter, a decline of 4.1% year on year. Output of liquids (oil and gas condensate) was 900,000 tonnes, a fall of 7.9% year on year, following a drop in output of 17.8% in 2010.