Discusses key economic indicators and trade statistics, which countries are dominant in the market, the U.S. market share, the political situation if relevant, the top reasons why U.S. companies should consider exporting to this country, and other issues that affect trade, e.g., terrorism, currency devaluations, trade agreements.
Last Published: 7/3/2019
According to official reports of the Government of Uzbekistan (GOU), Uzbekistan’s GDP grew by 5.1% to 407.5 trillion Soum ($49.5 billion) in 2018.  The GDP deflator to prices of 2017 was 28.1%.  Industrial production and the construction sector were the main drivers of the economy – supported by state funded investment projects, they demonstrated a 10% year-on-year output increase.  The annual inflation rate reached 17.5%.  For 2019, the Central Bank of Uzbekistan (CBU) projects the inflation rate to be between 13.5-14.5% with a peak expected in March.  The relatively high inflation rate results from ongoing economic reforms, including the September 2017 foreign exchange rate liberalization.
  • Key Economic Indicators of Uzbekistan:
Nominal GDP (billion USD)47.949.5
Consumer price inflation (percent)12.517.5
Foreign Direct Investment (billion USD)2.41.5
Current-account balance (billion USD)0.95-5.3
Exports FOB (billion USD)13.9514.26
Imports CIF (billion USD)13.0019.56
(Source: Data by country authorities and IMF estimates as of 04/22/2019)

Two years ago, Uzbekistan President Mirziyoyev started ambitious liberalization reforms to unlock the country’s potential for international business.  In September 2017, the government removed long-standing currency conversion restrictions and liberalized its monetary policy.   The soum, the local currency of Uzbekistan, demonstrated about a 2.5% year-on-year depreciation since then.  Standard & Poor and Fitch indicate that growing foreign trade turnover of the country and considerable net FX reserves made its mid-term outlook stable.

The volume of Uzbekistan’s foreign trade turnover in 2018 grew by 27.3% year-on-year to $33.8 billion, whereas exports contributed $14.3 billion and imports $19.5 billion.  The trade deficit has grown from $1.5 billion in 2017 to $5.3 billion by the end of 2018 due to a deferred demand satisfaction factor.  This is due to an increased demand for imported goods.  Local businesses, for instance, are taking advantage of new opportunities created by recent currency exchange and trade liberalization reforms to cover their unsatisfied import needs.

Major Trade Partners (Uzbekistan official statistics, 2018):
    • China, 19.0%
    • Russia, 16.9%
    • Kazakhstan, 8.9%
    • Turkey, 6.4%
The United States of America is Uzbekistan’s 13th largest trade partner.  In 2018, the volume of bilateral trade turnover almost doubled to about $410 million. 

Uzbekistan's Constitution provides for a presidential system with separation of powers and a representative government.  In practice, power is highly concentrated in the office of the president and the executive branch. 

Uzbekistan has signed numerous bilateral agreements on the avoidance of double taxation, though the United States considers its 1973 U.S.-USSR tax treaty as in force regarding Uzbekistan, while the Uzbek government does not.  Uzbekistan also has treaties providing most-favored-nation treatment with more than 45 countries.  Several agreements, including those with Iran, Japan, and the United States, are not yet in effect (U.S.-Uzbekistan agreements on trade relations, including most favored nation status, and on encouraging and reciprocally protecting investment, were completed in 1994 but never ratified by the United States.).  In 2014, Uzbekistan joined the CIS Free Trade Zone Agreement.
Violent extremist groups in Central Asia, including the Islamic Movement of Uzbekistan, al-Qa’ida, and DAESH, have not represented a threat to foreign businesses in Uzbekistan in recent years.

With an estimated population of 33 million, Uzbekistan has the foundation needed to become a regional economic powerhouse: a dynamic, literate, and entrepreneurial population, the largest in Central Asia, relatively good infrastructure; and the largest potential consumer market in the region.  Rich natural resources such as gold, natural gas, and cotton offer attractive opportunities for investors.  The government’s declared economic policy prioritizes the attraction of private investments through improvement of Uzbekistan’s business climate, privatization, and liberalization of foreign trade. 

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