Over the forecast period the government will continue to support growth by expanding public investment into infrastructure and industry, and by increasing public-sector wages and social payments. The IMF has repeatedly called for greater progress in developing the banking system, liberalising the trade and payments systems, and adopting a more flexible exchange-rate policy. Given the government's record, we remain sceptical that significant progress on these issues will occur.

Large trade surpluses, supported by increased prices for Uzbek commodity exports, have enabled the government to avoid deeper reforms. Ample revenue from commodity exports will continue to limit the incentive for undertaking far-reaching economic reforms. Russia, China and some Middle Eastern countries have shown increasing interest in investing in sectors such as hydrocarbons. However, the poor business environment will continue to deter most Western investors, with the authorities likely to retain a plethora of regulations on private-sector activity, including currency controls and high tariffs on imports.