Outlook for 2011-12
Monthly review
The president, Islam Karimov, dominates the political scene, and there is little prospect of democratisation over the forecast period. Mr Karimov, who was last elected for a seven-year term in December 2007, is expected to maintain a firm grip on power, as there seems to be no co-ordinated opposition to his rule from within the political hierarchy. Furthermore, years of repression have prevented the emergence of an opposition figure capable of challenging him successfully. Most of his opponents are living in exile. The centralisation of power in the person of Mr Karimov makes for a highly uncertain outlook once he eventually departs the political scene. Doubts over the 73-year-old leader's health add to the uncertainty.
The risks to stability in 2011-12 are compounded by the possibility of social unrest. The Economist Intelligence Unit does not perceive any immediate risk that the recent popular uprisings in the Middle East and North Africa (MENA) could directly spill over into Uzbekistan. Moreover, the authorities would act swiftly, and with force if necessary, to quell protests. If other authoritarian regimes in the Commonwealth of Independent States (CIS) were to be toppled-which cannot be ruled out, with Azerbaijan appearing most vulnerable-then the Uzbek regime could be at risk, since the demonstration effect of such an uprising in its immediate neighbourhood would be much stronger.
Uzbekistan could also be destabilised by the uncertain situation in the neighbouring Kyrgyz Republic, following ethnic violence there, although it appeared to cope adequately with the temporary influx of up to 100,000 refugees from the south of the Kyrgyz Republic in mid-June 2010. Opposition groups will remain too weak to mobilise a mass civil movement against the authorities. Furthermore, genuine opposition parties were impeded from taking part in the parliamentary election in December 2009. Consequently, given the lack of legitimate avenues of protest or opposition, spontaneous popular unrest, sparked by social and economic grievances, could increase. The occurrence of such violent unrest as seen in the Kyrgyz Republic in mid-2010 is unlikely in Uzbekistan, as the response of the security forces to any public upheaval would be much harsher. The authorities have also been keen to play down any hint of popular anti-Kyrgyz sentiment that might give rise to inter-ethnic violence.
Mr Karimov was last elected in December 2007, and the next presidential election is not due until 2014. A parliamentary election will also be held in that year, although parliament is at best a rubber-stamp body and no opposition parties were allowed to stand for the most recent election, in December 2009. We do not expect any moves towards democratisation over the medium term. The next elections will also be heavily controlled by the authorities, and voters will not be given a meaningful choice. The more significant issue is therefore whether Mr Karimov will remain in office and stand again in 2014. This is a conceivable outcome, if his health permits, and he would be certain to win re-election under such a scenario. However, in view of his advancing age, he is more likely to attempt an orderly handover of power to a trusted successor, whether in 2014 or earlier. Recent moves to amend the constitution, which would make the leader of the Senate (the upper house of parliament) president in the event of the current president's incapacity, could indicate that Mr Karimov is becoming more concerned about the succession, since the leader of the Senate would be his appointee. If Mr Karimov's health were to start to deteriorate, it is likely that he would speed up the succession process. Were he to die in office without having agreed a succession plan with other members of the elite, this could result in a destabilising power struggle. This could lead to prolonged political upheaval within the country, including mass social unrest, if the authorities were perceived to be temporarily weakened. We view a "palace coup"-whereby other members of the elite forcibly removed Mr Karimov from office-as a less likely scenario. Mr Karimov has so far successfully managed to limit the power of potential rivals, and we expect him to maintain a tight grip over the forecast period.
Relations with the US and the EU have improved from a low in 2005, driven by anti-terrorist initiatives, the regional security agenda, the small steps taken by the Uzbek authorities towards tackling human rights concerns, and the desire of some EU states to look for alternative energy sources in Central Asia in order to reduce their reliance on Russia. The US is becoming a more prominent partner in anti-terrorism measures, following an agreement in 2009 to allow US non-munitions supplies to Afghanistan to transit Uzbek territory. Relations with Russia will occasionally be troubled, largely because of Russia's desire to increase its military presence in the region (Russia has mooted plans to build a second military base in the Kyrgyz Republic, close to the border with Uzbekistan).
Ties with Uzbekistan's neighbours in Central Asia will occasionally be tense. The unrest in 2010 in the Kyrgyz Republic caused Uzbekistan temporarily to close its borders with that country, and relations will remain strained because of border demarcation disputes, as well as ethnic tensions within the two countries' populations. Nevertheless, the Uzbek authorities are likely to support the Kyrgyz government, as it is in Uzbekistan's interest that the situation in the Kyrgyz Republic stabilises. Ongoing disputes over water and energy supplies will also exacerbate tensions between Uzbekistan and its neighbours. Depending on how the security situation develops in Afghanistan (and, increasingly, in Tajikistan), there is a risk that insurgents in those countries-among them significant numbers of ethnic Uzbeks-could expand their activities into Uzbekistan.
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 Uzbekistan's commodity exports, have enabled the government to avoid deeper reforms. Ample revenue from gas sales 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.
Uzbekistan's fiscal position is difficult to assess, because of the high degree of opacity in the limited data available. Preliminary official data report a budget surplus of 0.3% of GDP in 2010. Revenue performance has improved in recent years as a result of strong economic growth, high commodity prices and reforms to ease the tax burden. GDP expansion, along with solid export earnings from gas sales, will support revenue growth over the forecast period. A reduction of 1 percentage point in the rates of profit tax and personal income tax in 2011 (following a similar reduction in 2010) will help to sustain economic growth and encourage further activity to move out of the shadow economy. However, social spending will continue to rise strongly, and expenditure on defence and internal security measures will remain high. We forecast that the consolidated budget will record small deficits in 2011-12, equal to 0.2-0.3% of GDP. To support infrastructure development and investment in basic industries, the government will also draw on the Fund for Reconstruction and Development (FRD), which is financed by energy export revenue. According to Mr Karimov, the FRD held around US$3.7bn (equal to 11% of GDP) at end-2009.
Export-related foreign-exchange inflows, combined with large increases in public-sector wages and benefits, have maintained inflationary pressures. The money supply is forecast to grow rapidly in 2011-12 (albeit at a slower pace than in 2005-07), reflecting our expectation that prices for Uzbek gas and gold exports will remain high relative to their historical levels. In the past the IMF has recommended that the Central Bank of Uzbekistan consider targeting a moderate nominal appreciation of the currency to control inflation and to reduce reliance on indirect monetary policy tools. By contrast, the authorities will continue to prefer to allow the som to depreciate in nominal terms, in an attempt to support exports. However, they are unlikely to allow a rapid depreciation or to consider a devaluation to bring the som's official value into line with the (much weaker) black-market exchange rate.
International assumptions summary | ||||
(% unless otherwise indicated) | ||||
2009 | 2010 | 2011 | 2012 | |
Real GDP growth | ||||
World | -0.8 | 4.8 | 4.2 | 4.2 |
Russia | -7.9 | 4.0 | 4.0 | 4.2 |
EU27 | -4.2 | 1.8 | 1.7 | 1.8 |
Exchange rates | ||||
¥:US$ | 93.7 | 87.9 | 81.5 | 81.0 |
US$:€ | 1.393 | 1.326 | 1.308 | 1.250 |
SDR:US$ | 0.646 | 0.652 | 0.645 | 0.655 |
Financial indicators | ||||
¥ 3-month money market rate | 0.39 | 0.17 | 0.31 | 0.56 |
US$ 3-month commercial paper rate | 0.26 | 0.26 | 0.34 | 0.70 |
Commodity prices | ||||
Oil (Brent; US$/b) | 61.9 | 79.6 | 101.0 | 85.0 |
Gold (US$/troy oz) | 973.0 | 1,224.7 | 1,336.3 | 1,232.5 |
Cotton (US cents/lb) | 62.7 | 104.8 | 146.8 | 99.8 |
Industrial raw materials (% change in US$ terms) | -25.6 | 44.5 | 26.6 | -10.7 |
Note. Regional GDP growth rates weighted using purchasing power parity exchange rates. |
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Official output data are highly suspect and often internally contradictory. We expect that officially reported growth rates will continue to exaggerate the true rate of economic expansion, and that the authorities will report GDP growth rates that are close to the official target. The authorities targeted real GDP growth of 7-8% in 2010, following reported growth of 8.1% in 2009. Official data put growth at 8.5% in 2010, a slight pick-up compared with 2009. The chief external factors affecting economic performance are trends in global commodity prices. Following an estimated rise of around 25% on average in 2010, gold prices are forecast to go up by a further 9% in 2011, before trending downwards in 2012. In 2011-12, prices for cotton will remain at much higher levels than in 2005-09, following a sharp rebound in 2010. We continue to expect that Uzbekistan will benefit from higher prices than in recent years for its gas exports, after a tripling in prices between 2007 and 2009. Given high global prices for Uzbekistan's main exports, and the solid performance of the Russian economy, we forecast that real GDP growth (as officially reported) will rise to 8.7% in 2011. A continued expansion in the Russian economy should support an acceleration in 2012, to GDP growth of 9%. The economy will also be assisted by rising investment, partly funded from the FRD, but also by foreign direct investment (FDI). Private consumption will suffer from lower inflows of remittances than in 2007-08, but will be sustained by government efforts to increase wages and social payments.
The government claims that inflation in 2010 was within the official target, at 7.6%. However, official figures understate the true level of inflation, which is likely to be as much as twice as high-we estimate it at 15% in 2010. The authorities will continue to attempt to limit inflation by the imposition of price controls on basic foodstuffs and energy. Lower global commodity prices had a disinflationary impact in 2009, but this trend reversed in 2010 (particularly because food prices rose as leading grain-exporting countries in the region were affected by drought), and commodity price trends will continue to exert upward pressure on prices in 2011. A continuing depreciation of the local currency will also boost imported inflation. Robust money supply growth, as the government increases wages and benefits further, will also fuel inflation. We expect average annual inflation to pick up to 16% in 2011. A stabilisation in global food prices will lead to a slowdown to 14% in 2012.
The authorities will continue to target a slow pace of nominal depreciation in order to support export competitiveness. However, the rate of depreciation will be faster than in recent years. A global weakening of emerging-market currencies against the US dollar in late 2008 and early 2009, owing to greater risk aversion, resulted in an acceleration of the trend of som depreciation. The Uzbek currency was also affected by contagion from the steep falls in the Russian rouble and the Kazakh tenge. The pace of depreciation slowed in mid-2009 as global risk appetite returned, but picked up again in 2010, as increasing instability in the region (particularly in the Kyrgyz Republic) raised concerns about the security situation in Central Asia. By end-March 2011 the som had depreciated by a cumulative 23.3% since end-September 2008. We expect the official exchange rate to be around Som1,843:US$1 by the end of 2012, compared with Som1,638:US$1 at end-2010, a fall of about 11%.
The current-account surplus increased in 2010, largely owing to higher prices for Uzbekistan's commodity exports, and also to a recovery in remittances as the Russian economy returned to growth. We estimate the current-account surplus in 2010 at US$5.8bn (15% of GDP). Our forecast assumes that gas export prices will remain higher than in the historical period, as Uzbekistan successfully negotiated much higher prices with its main purchasers in 2009, in an attempt to bring its charging mechanism into line with European gas prices. Exports of automotives will continue to rise over the forecast period, and cotton prices will remain high in 2011. The pick-up in export revenue will push up the trade surplus to rise in 2011, but this will be partly offset by increased import costs, owing to higher global food prices, as well as by rising demand for consumer goods and for imported inputs into state-funded infrastructure development. We expect the current-account surplus to increase in US dollar terms in 2011, to around US$7bn. The surplus will fall in 2012 as global prices ease for Uzbekistan's main exports, reducing revenue from sales of gold and cotton.
Forecast summary | ||||
(% unless otherwise indicated) | ||||
2009a | 2010a | 2011b | 2012b | |
Real GDP growth | 8.1c | 8.5c | 8.7 | 9.0 |
Consumer price inflation (av)d | 14.1 | 15.0 | 16.0 | 14.0 |
Consumer price inflation (end-period)d | 10.6 | 16.0 | 17.3 | 14.0 |
Government balance (% of GDP) | 0.2c | 0.3c | -0.2 | -0.3 |
Exports of goods fob (US$ m) | 10,735 | 12,010 | 13,160 | 12,680 |
Imports of goods fob (US$ m) | -9,023 | -8,030 | -8,210 | -8,430 |
Current-account balance (US$ m) | 3,545 | 5,843 | 7,054 | 6,159 |
Current-account balance (% of GDP) | 10.8 | 15.0 | 15.3 | 11.4 |
External debt (year-end; US$ bn) | 3.8 | 3.9 | 3.9 | 4.1 |
Exchange rate Som:US$ (av) | 1,467c | 1,587c | 1,696 | 1,793 |
Exchange rate Som:US$ (end-period) | 1,510c | 1,638c | 1,736 | 1,843 |
Exchange rate Som:€ (av) | 2,043c | 2,104c | 2,217 | 2,242 |
Exchange rate Som:€ (end-period) | 2,164c | 2,224c | 2,187 | 2,249 |
a Economist Intelligence Unit estimates. b Economist Intelligence Unit forecasts. c Actual. d The data are based on the IMF's inflation measure. |
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The president, Islam Karimov, appears worried that the uprisings against authoritarian rulers in the Middle East and North Africa (MENA) could spread to Central Asia. Although the MENA unrest has so far had no direct impact on former Soviet states, there have been anti-government demonstrations in Armenia and Azerbaijan in recent weeks. Any spread of large-scale unrest to the Commonwealth of Independent States (CIS) would be much more likely to affect the situation in Uzbekistan. In his Nowruz (Persian New Year) address on March 21st, Mr Karimov talked about the need to safeguard Uzbekistan's achievements-an implicit call for stability and a warning against any unrest.
The authorities have also taken a series of concrete measures to try to prevent potential unrest. The government has reportedly imposed increasing controls over electronic communications. According to the privately owned Times of Central Asia, the Communication and Information Agency of Uzbekistan is asking mobile telephony firms and Internet service providers (ISPs) to report the mass dissemination of text messages that might incite unrest. Protest organisers have used mass text-messaging to mobilise crowds in Moldova and Belarus in the recent past. In addition, numerous visitors from the Kyrgyz Republic-which saw an outbreak of inter-ethnic violence in June 2010, following the violent overthrow of the then president, Kurmanbek Bakiyev, in April 2010-have been refused entry to Uzbekistan across land borders in recent months.
The security services have also continued their crackdown on religious activity, under the guise of counter-terrorism measures. In March a number of bookshops selling religious literature were closed, with the authorities claiming that they were selling illegal publications, the list of which has been broadened in recent years and encompasses many books of a non-extremist nature. The authorities have continued to harass religious groups, with a Baptist service halted by police in mid-March. Mosques have also reportedly been under pressure not to lead prayer sessions during working hours.
Alongside its heavy-handed tactics, the government is offering some minor political changes. The constitutional alterations announced at the beginning of March (March 2011, The political scene) may be linked to a desire to pre-empt popular protest against authoritarianism. The changes give more power to parliament at the expense of the presidency, and have been officially portrayed as a "continuation" of the democratisation process in Uzbekistan, although any democratisation that the country has undergone since independence has been limited to the superficial trappings, such as the holding of (flawed) elections. Furthermore, parliament contains only parties that are loyal to the president, so that Mr Karimov will retain de facto control over policymaking.
In addition, the constitution was amended so that the speaker of the Senate (the upper house of parliament) will succeed the president in the event of his incapacity. Previously, the constitution stated that in such an event, parliament would elect a temporary president to serve for three months before a new election. The current speaker of the Senate, who has been in the post since 2006, is Ilgizar Sobirov, from Khorezm province. The constitutional changes therefore suggest instead that Mr Karimov is seeking to ensure the installation of a preferred successor, since, in effect, the appointment of Senate speaker lies in his power, as all political parties in parliament are loyal to him.
Official sensitivity about Uzbekistan's poor human rights record appears to have led to a decision to close the Tashkent office of the Human Rights Watch (HRW), a US-based non-governmental organisation (NGO). Although the Uzbek government had initially allowed the organisation to start operating in Uzbekistan in 1996, staff were frequently subject to police harassment, and faced difficulties in obtaining work visas and accreditation documents.
The government has been running a persistent campaign against HRW in recent years. The authorities deported a consultant for the organisation in July 2009, and a researcher was physically attacked in mysterious circumstances in December 2009. The head of HRW's Uzbekistan office, Steve Swerdlow, was able to spend just two months of 2010 in the country, and was denied a work permit in December 2010. On March 10th the Supreme Court informed HRW that the Ministry of Justice was to end the organisation's presence in Uzbekistan.
The EU, which had been embarrassed by adverse publicity surrounding the visit of Mr Karimov to meet EU officials in Brussels, the Belgian capital, in January (February 2011, The political scene), responded by postponing the visit of an EU delegation to Uzbekistan. During its meetings with Mr Karimov in Brussels the EU had raised the issue of HRW's ability to operate, and had also raised the cases of three imprisoned human rights activists: Isroiljon Kholdorov, Norboy Kholjigitoy, and Agzam Farmonov.
Owing to robust revenue inflows from commodity exports, official figures report that Uzbekistan has run a small consolidated fiscal surplus in recent years. The budget is reported to have ended 2010 in surplus equivalent to 0.3% of GDP. The government has also used a proportion of energy export revenue to boost the Fund for Reconstruction and Development (FRD), and has drawn on the FRD to finance important infrastructure projects.
However, budget data are opaque, and the government is gradually reducing subsidies to the population, which suggests that the fiscal position is less robust than reported. Utilities costs are set centrally, and are for the most part below cost-recovery levels. In practice, the subsidy level is even higher, as it is difficult for utilities providers to force delinquent consumers to pay. The government increased most utilities costs by around 9% from April 1st. However, when further increases introduced over the previous 12 months are taken into account, most households are now paying around 19% more year on year for their utilities.
Increases in the cost of utilities, 2010-11 | ||||
(kwh, unless otherwise indicated) | ||||
Oct 1st 2010 | Apr 1st 2011 | |||
Som/unit | % change | Som/unit | % change | |
Electricity | 76.80 | 8.9 | 83.60 | 8.9 |
Electricitya | 38.40 | 8.6 | 41.80 | 8.9 |
Central heating (sq metre) | 397.03 | 8.5 | 436.27 | 9.9 |
Hot waterb (person) | 4,140.52 | 8.5 | 5,460.00 | 31.9 |
Hot waterc (cu metre) | 1,272.29 | 8.5 | 1,398.04 | 9.9 |
Natural gas (cu metre) | 67.50 | n/a | 79.90 | 18.3 |
a For homes with electric ovens. b For homes without meters. c For homes with meters. | ||||
Source: Trends News Agency. |
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Officially, monetary policy is tight. The Central Bank of Uzbekistan has a base interest rate, the refinancing rate, set at 12% per year, well above the official rate of year-on-year inflation of around 7-8%. However, the authorities do not release any information on the money supply, and inflation is probably running at twice the rate of official figures (February 2011, Economic performance). The indications are therefore that monetary policy is loose-and is loosening, since the Central Bank reduced the refinancing rate from 14% to 12% at the beginning of the year, despite rising global food and commodity prices that are having an effect on Uzbek inflation. This suggests that the authorities are concerned to boost economic growth, despite the risks to inflation, and indicates that the economy is performing less well than claimed (see Economic performance).
Another aim of the Central Bank is to ensure that state-owned enterprises in key sectors are properly financed. There is therefore ample credit creation for the industrial sector and the authorities continue to instruct commercial banks on their lending practices. Although the authorities have taken measures to sterilise the commodities windfall by ring-fencing a proportion of energy export revenue in the FRD, their attempts to prevent credit creation from leading to an expansion in the money supply tend to be crude. Commercial banks, on government instruction, delay enterprises' access to their savings and make foreign-currency transactions difficult and time-consuming. As a result, there is an artificial hard-currency shortage in Uzbekistan, leading to the re-emergence of a dual exchange-rate system. There is an official exchange rate available to limited numbers of favoured enterprises and well-connected individuals, and a black-market exchange rate where the local currency trades at a 30% discount.
The lower house of parliament, the Legislative Chamber, is now considering introducing new legislation to encourage economic competition. For all the talk of Uzbekistan developing a parliamentary system, the initiative for the new law came from a speech given by Mr Karimov on November 12th 2010. In February the president declared that 2011 was to be the Year of Small Business and Private Enterprise. The aim is to enhance mechanisms for regulating markets, ease entry requirements for small businesses, and stop monopolies from operating in commodities exchanges.
However, it is doubtful whether the programme will extend beyond rhetoric. State control over the economy allows well-connected figures to cultivate patronage networks that help to keep the regime in power. Allowing the private sector to flourish would threaten the benefits that authority figures accrue from their economic control. Furthermore, the development of the private sector is hampered by the prevalence of corruption. Corruption is closely intertwined with the patronage networks that sustain the regime, and addressing the problem would also risk eroding these networks.
First-quarter figures are not yet available, but the government is likely to claim that output grew by at least 6% year on year, in line with its official target. The authorities have reported that industrial output rose by 4.9% year on year in January, compared with 3.1% in January 2010. The State Statistics Committee reports that electricity generation rose to 8.8bn kwh during the first two months of 2011, an increase of 2.7% year on year. The State Demonopolisation Committee's business activity index for the industrial sector increased by 6% in February compared with January. The index pulls together survey data from 100 large and medium-sized firms, on orders, employment and inventories. The best-performing sectors were agriculture, agri-processing, consumer gods, construction, capital goods and machinery, energy and metallurgy. The index is relatively crude as a measurement of output, although it does provide an idea of business sentiment.
The economy is reported to be expanding at a healthy pace, despite a notable decline in the importance of gas exports. Energy exports fell by almost 20% in value terms in 2010, which was a marked difference to performance in previous years, when the sale of increasing volumes of gas at higher prices had provided a substantial windfall to the economy. Furthermore, energy output fell by 3.8% year on year in January 2011. There has been no official explanation for the decline in energy exports in 2010, but it is likely to be linked to Russian demand for Uzbek gas to export to its own markets. It could also be connected to internal regime politics. A leaked US government cable from 2007 reported rumours that Gulnara Karimova, Mr Karimov's daughter, exercised control over four-fifths of gas exports through Zeromax, a Swiss-registered company. The government began closing Zeromax's business operations in 2010, for reasons which remain unclear (July 2010, Economic performance). This may have had a negative effect on the gas supply relationship with Russia.
The economy appears to have prospered, despite the fall in energy exports, because global prices for Uzbekistan's two other main export commodities, gold and cotton, both soared in 2010. Although production of cotton fibre has stagnated at around 1m tonnes annually, and despite the imposition of bans on Uzbek cotton by a number of Western companies, owing to concerns over child labour, revenue from cotton exports rose by 46% year on year in 2010, largely because of a 67% increase in global prices. Similarly, gold prices exceeded US$1,400/oz in March 2011, up by over one-quarter year on year, following a rise of 26% in 2010. Although the government does not publish gold production figures, output is probably close to 100 tonnes annually.
In addition to high global prices for gold and cotton, the current-account surplus was also boosted in 2010 by a significant recovery in remittance inflows from Uzbek workers abroad, largely in Russia. The Uzbek authorities do not publish data on remittance flows, but according to figures from the Russian Central Bank (RCB), remittance transfers from Russia to Uzbekistan exceeded those to any other country in 2010. According to the RCB, remittances to Uzbekistan in 2010 amounted to US$2.85bn, or 22% of total remittance outflows from Russia. Remittances to Uzbekistan increased by 38.6% compared with 2009, but remained below the peak of US$3bn reached in 2008. The average amount of each individual transfer, which was US$584, was slightly higher than the US$574 recorded in 2009, but also remained below the peak of US$760 seen in 2008.
The economy is less reliant on remittances than its neighbours Tajikistan and the Kyrgyz Republic. Remittances from Russia to Uzbekistan amounted to 7.3% of Uzbekistan's GDP in 2010, compared with figures of 24.6% and 40.7% for the Kyrgyz Republic and Tajikistan, respectively. Inflows per head are also much lower, amounting to just US$100 in Uzbekistan in 2010, compared with US$203 in the Kyrgyz Republic and US$288 in Tajikistan. However, the figures highlight the fact that Uzbekistan is a significant exporter of labour, as well as commodities, and that remittances are buttressing the balance-of-payments position. Net inflows of remittances from Russia in 2010, at US$2.7bn, were equivalent to 41% of the estimated current-account surplus of US$6.6bn in that year, and to 21% of revenue from goods exports.
2006a | 2007a | 2008b | 2009b | 2010b | 2011c | 2012c | |
GDP | |||||||
Nominal GDP (US$ m) | 17,022 | 22,298 | 27,899a | 32,792a | 38,956a | 45,963 | 53,992 |
Nominal GDP (Som bn) | 20,759 | 28,186 | 36,839a | 48,097a | 61,831a | 77,950 | 96,823 |
Real GDP growth (%) | 7.3 | 9.5 | 9.0a | 8.1a | 8.5a | 8.7 | 9.0 |
Origin of GDP (% real change) | |||||||
Agriculture | 6.2b | 6.1b | 4.5 | 5.7 | 6.8 | 7.0 | 7.0 |
Industry | 10.8b | 12.1b | 12.7 | 9.0 | 8.3 | 8.1 | 8.3 |
Services | 6.0b | 11.0b | 10.5 | 9.6 | 10.1 | 10.5 | 11.0 |
Population and income | |||||||
Population (m) | 26.5 | 26.9 | 27.5a | 28.0a | 28.5a | 29.0 | 29.7 |
GDP per head (US$ at PPP) | 2,156b | 2,396b | 2,604 | 2,794 | 2,997 | 3,254 | 3,532 |
Fiscal indicators (% of GDP) | |||||||
Public-sector revenue | 31.4 | 31.7 | 31.8 | 32.1 | 32.6 | 32.9 | 33.3 |
Public-sector expenditure | 30.9 | 30.2 | 30.3 | 31.9 | 32.3 | 33.1 | 33.6 |
Public-sector balanced | 3.8e | 2.7e | 1.5a | 0.2a | 0.3a | -0.2 | -0.3 |
Net public debt | 21.3 | 15.7 | 9.8 | 9.0 | 7.5 | 6.8 | 6.2 |
Prices and financial indicators | |||||||
Exchange rate Som:US$ (end-period) | 1,238 | 1,288 | 1,383a | 1,510a | 1,638a | 1,736 | 1,843 |
Exchange rate Som:€ (end-period) | 1,634 | 1,881 | 1,922a | 2,164a | 2,224a | 2,187 | 2,249 |
Consumer prices (end-period; %)f | 11.4 | 11.9 | 13.7 | 10.6 | 16.0 | 17.3 | 14.0 |
Stock of money M1 (% change) | 36.5b | 44.9b | 28.4 | 29.1 | 32.1 | 33.9 | 30.4 |
Stock of money M2 (% change) | 36.8b | 46.1b | 31.8 | 31.4 | 33.7 | 34.9 | 32.7 |
Refinancing rate (%; end-period) | 14.0 | 14.0 | 14.0a | 14.0a | 14.0a | 12.0 | 12.0 |
Current account (US$ m) | |||||||
Trade balance | 1,774 | 1,692 | 1,021 | 1,712 | 3,980 | 4,950 | 4,250 |
Goods: exports fob | 5,615 | 8,029 | 10,298 | 10,735 | 12,010 | 13,160 | 12,680 |
Goods: imports fob | -3,841 | -6,338 | -9,277 | -9,023 | -8,030 | -8,210 | -8,430 |
Services balance | -53 | 572 | 768 | 621 | 525 | 550 | 500 |
Income balance | 35 | 112 | 223 | 162 | 188 | 214 | 209 |
Current transfers balance | 1,171 | 1,951 | 2,038 | 1,050 | 1,150 | 1,340 | 1,200 |
Current-account balance | 2,927 | 4,326 | 4,050 | 3,545 | 5,843 | 7,054 | 6,159 |
External debt (US$ m) | |||||||
Debt stock | 4,032 | 3,931 | 3,995a | 3,843 | 3,884 | 3,923 | 4,084 |
Debt service paid | 851 | 760 | 699a | 708 | 667 | 684 | 721 |
Principal repayments | 677 | 580 | 562a | 570 | 535 | 548 | 580 |
Interest | 174 | 180 | 137a | 138 | 132 | 136 | 141 |
Debt service due | 851 | 760 | 699a | 708 | 667 | 684 | 721 |
International reserves (US$ m) | |||||||
Total international reserves | 4,459 | 7,413 | 10,150 | 9,000 | 9,800 | 10,000 | 10,200 |
a Actual. b Economist Intelligence Unit estimates. c Economist Intelligence Unit forecasts. d Data do not sum in source. e Large statistical discrepancy in source data. f The data are based on the IMF's inflation measure. | |||||||
Source: IMF, International Financial Statistics. |
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2009 | 2010 | |||||||
1 Qtr | 2 Qtr | 3 Qtr | 4 Qtr | 1 Qtr | 2 Qtr | 3 Qtr | 4 Qtr | |
Output | ||||||||
GDP at constant prices (% change, year on year)a | 7.9 | 8.5 | 7.6 | 8.4 | 7.6 | 8.4 | 8.9 | 9.1 |
Industrial production (% change, year on year)a | 9.9 | 8.3 | 9.1 | 8.7 | 7.0 | 9.0 | 8.9 | 8.3 |
Agricultural output (% change, year on year)a | 5.7 | 3.5 | 0.7 | 12.9 | 6.1 | 7.7 | 9.6 | 3.8 |
Financial indicators | ||||||||
Exchange rate Som:US$ (av) | 1,409 | 1,460 | 1,492 | 1,506 | 1,533 | 1,575 | 1,610 | 1,631 |
Exchange rate Som:US$ (end-period) | 1,432 | 1,484 | 1,499 | 1,511 | 1,554 | 1,595 | 1,620 | 1,640 |
Foreign trade (US$ m)a | ||||||||
Exports of goods & services | 2,212 | 3,199 | 3,214 | 3,146 | 2,701 | 3,484 | 3,381 | 3,478 |
Imports of goods & services | -2,308 | -2,180 | -2,365 | -2,585 | -1,620 | -2,020 | -2,302 | -2,856 |
Trade balance | -95 | 1,019 | 850 | 560 | 1,081 | 1,464 | 1,079 | 622 |
a Economist Intelligence Unit calculations based on official data. | ||||||||
Sources: State Statistics Committee; UzReport.com. |
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Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | |
Exchange rate Som:US$ (av) | ||||||||||||
2009 | 1,397 | 1,405 | 1,423 | 1,443 | 1,460 | 1,477 | 1,487 | 1,492 | 1,497 | 1,502 | 1,506 | 1,510 |
2010 | 1,519 | 1,532 | 1,547 | 1,562 | 1,574 | 1,589 | 1,602 | 1,611 | 1,618 | 1,624 | 1,631 | 1,638 |
2011 | 1,646 | 1,659 | 1,674 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a |
Exchange rate Som:US$ (% change, month on month) | ||||||||||||
2009 | -1.0 | -0.6 | -1.2 | -1.4 | -1.2 | -1.1 | -0.7 | -0.4 | -0.3 | -0.3 | -0.3 | -0.3 |
2010 | -0.6 | -0.9 | -0.9 | -0.9 | -0.8 | -0.9 | -0.8 | -0.6 | -0.4 | -0.4 | -0.4 | -0.4 |
2011 | -0.5 | -0.8 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a |
Natural Gas: Europe (US$/m BTU) | ||||||||||||
2009 | 13.9 | 11.0 | 10.9 | 8.5 | 8.1 | 8.0 | 6.7 | 6.9 | 7.1 | 7.6 | 7.8 | 8.0 |
2010 | 8.8 | 8.8 | 8.9 | 7.5 | 7.3 | 7.7 | 8.0 | 8.5 | 8.3 | 8.3 | 8.6 | 8.7 |
2011 | 9.6 | 9.4 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a |
Oil: Brent crude prices (US$/b; av) | ||||||||||||
2009 | 44.9 | 43.2 | 46.8 | 50.9 | 57.9 | 68.6 | 64.9 | 72.5 | 67.7 | 73.2 | 77.0 | 74.7 |
2010 | 76.4 | 74.3 | 79.3 | 85.0 | 76.3 | 74.8 | 74.7 | 76.7 | 77.8 | 82.9 | 85.7 | 91.8 |
2011 | 96.3 | 104.0 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a |
Gold: London prices (US$/troy oz; av) | ||||||||||||
2009 | 859.0 | 943.0 | 924.0 | 890.0 | 929.0 | 946.0 | 934.0 | 949.0 | 997.0 | 1,043.0 | 1,127.0 | 1,135.0 |
2010 | 1,118.0 | 1,095.0 | 1,113.0 | 1,149.0 | 1,205.0 | 1,233.0 | 1,193.0 | 1,216.0 | 1,271.0 | 1,342.0 | 1,370.0 | 1,391.0 |
2011 | 1,356.0 | 1,373.0 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a |
Cotton: Northern Europe (US cents/lb) | ||||||||||||
2009 | 57.7 | 55.2 | 51.5 | 56.8 | 62.0 | 61.4 | 64.8 | 64.2 | 64.0 | 66.8 | 71.8 | 76.0 |
2010 | 77.4 | 80.1 | 85.8 | 88.1 | 90.1 | 93.0 | 84.1 | 90.4 | 104.7 | 126.6 | 154.7 | 168.0 |
2011 | 178.9 | 212.5 | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a | n/a |
Sources: UzReport.com; Haver Analytics. |
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Please see graphic below
Please see graphic below
Please see graphic below
Land area
447,400 sq km, of which 9% is arable
Population
27.6m (January 2009)
Main towns
Population in '000, July 1999
Tashkent (capital): 2,400
Samarkand: 392
Namangan: 378
Climate
Continental desert
Languages
Uzbek is the state language; Russian is widely spoken; Tajik is spoken in Samarkand and Bukhara; Karakalpak is used in the autonomous republic of Karakalpakstan
Weights and measures
Metric system
Currency
The som-coupon was introduced on November 29th 1993 as the successor to the rouble. It was replaced by the som on July 1st 1994, at a rate of Som7:US$1. A multiple exchange-rate system was introduced in 1997, and the main reference rate was subsequently repeatedly devalued in order to keep pace with the rapid depreciation of the currency on the black market. The exchange rate was unified on October 15th 2003 at a rate of Som975:US$1
Time
Six hours ahead of GMT
Public holidays
January 1st (New Year); March 8th (International Women's Day); March 20th (Prophet's Birthday); Nowruz (Persian New Year); May 1st (Labour Day); May 9th (Day of Memory and Respect); September 1st (Independence Day); Eid al-Fitr (end of Ramadan); December 8th (Constitution Day); Eid al-Adha (Feast of the Sacrifice)
Official name
Republic of Uzbekistan
Legal system
The Soviet republic of Uzbekistan declared its independence on September 1st 1991, after the failure of the Moscow coup. A new constitution was adopted on December 8th 1992, declaring Uzbekistan a multiparty democracy and a presidential republic
National legislature
A bicameral parliament, the Oliy Majlis (Supreme Assembly), was elected in two stages in December 2004 and January 2005, replacing the unicameral 250-member legislature. Following the election in December 2009, the Legislative Chamber, the lower house of the new parliament, comprises 135 members chosen by direct election. The 100-member upper house, the Senate, is made up of 84 senators elected by local governments and 16 senators appointed by the president
Electoral system
Universal suffrage over the age of 18
National elections
December 2009 (parliamentary); December 2007 (presidential). Next elections due in December 2014 (parliamentary and presidential)
Head of state
Islam Karimov, re-elected president with 88% of the vote on December 23rd 2007
National government
Council of Ministers, headed by the prime minister, who is nominated by parliament on the recommendation of the president. In practice, Mr Karimov exercises total control and appoints regional governors, who report directly to him
Main political parties
Adolat (Justice) Social Democratic Party; Fidokorlar (Self-Sacrificers' Party); Liberal Democratic Party (LDP); People's Democratic Party (PDP, former Communist Party); Milliy Tiklanish (National Revival), all pro-government creations; Birlik (Unity) and Erk (Freedom), both banned democratic parties
Council of Ministers
Prime minister: Shavkat Mirziyoyev
Deputy prime ministers:
;Rustam Azimov
;Rustam Kasymov
;Gulomdzhon Ibragimov
;Nodirkhon Khanov
;Farida Akbarova
;Abdulla Aripov
;Elyor Ganiyev
Key ministers
Agriculture & water: Sayfiddin Ismailov
Culture: Rustam Kurbanov
Defence: Kabul Berdiyev
Economy: Vyacheslav Golyshev
Education: Avazjon Marakhimov
Emergency situations: Bakhtiyor Subanov
Finance: Rustam Azimov
Foreign affairs: Elyor Ganiyev
Health: Feruz Nazirov
Interior: Bakhodir Matlyubov
Justice: Buritosh Mustafaev
Labour & social protection: Akiljan Abidov
National Security Service chairman
Rustam Inoyatov
Central Bank chairman
Faizulla Mullazhanov