Country Report Uzbekistan January 2009

Outlook for 2009-10

• The president, Islam Karimov, will retain a tight grip on power, with few prospects for democratisation or increased transparency.
• There are questions regarding MrKarimov's health, and uncertainty over who will eventually succeed him is likely to persist.
• The relaxation of EU sanctions in October 2008 will encourage Uzbekistan to attempt to foster closer economic links with the West. However, ties with Russia and China will also remain strong.
• Real GDP growth will moderate over the forecast period, owing to a decline in export demand. We now forecast real GDP growth of 2.5% in 2009, ahead of a pick-up to 3.5% in 2010.
• Inflation is forecast to slow from an estimated 12% in 2008, owing to lower import prices for food and fuel, but the extent of disinflation will be limited by rapid money supply growth.
• The current-account surplus is now expected to average just over 16% of GDP in 2009-10, as import demand falls in Russia, Uzbekistan's chief export market, and as prices for Uzbek cotton and gold exports fall.

Monthly review

• A new law has adjusted the composition of the Legislative Chamber (the lower house of parliament). Following the election in December 2009, the chamber will have an extra 30 deputies, half of them from the Ecological Movement of Uzbekistan (EMU).
• MrKarimov has continued to reshuffle regional governors in an attempt to prevent potential rivals from consolidating a power base. Criticism of their failure to improve regional economies is the ostensible reason for the sackings.
• The Uzbek authorities have continued to clamp down on popular protests. Despite criticism from Western governments, Uzbekistan is refusing to co-operate fully with international human rights organisations.
• Government concern over the possible effects on Uzbekistan of the global economic crisis has elicited policy measures to boost the real economy and to safeguard the banking sector from financial turbulence.
• The state budget recorded a surplus of 1.9% of GDP in the first three quarters of 2008. The target for a full-year deficit of 1% of GDP is likely to be met.
• The cotton sector has experienced a mixed performance. Output of raw cotton fell in 2008, but production of cotton fibre increased by 7% year on year in January-October.

Source: Country Report

This report covers the following industry codes:
SIC Code: 20;60;65;1
NAICS Code: 311;52;53

This report covers the following industry codes:
SIC Code: 20;60;65;1
NAICS Code: 311;52;53