ADB sees Uzbekistan continuing to grow

According to the Asian Development Bank, Uzbekistan remains one of the most dynamic growth markets in Central Asia. In the next two years, the economy should continue to expand by almost seven percent per year - driven by consumption, investment and the continued restructuring of the country. However, the optimistic outlook comes with a caveat: global risks are increasing and old structural weaknesses are far from being overcome. According to the ADB, the Uzbek economy grew by 7.7 percent last year, even exceeding expectations. The strong growth trajectory thus continued, after gross domestic product had already risen by 6.7 percent in 2024. The fact that the economy remained so robust was primarily due to the fact that almost all major economic sectors grew at the same time. Services, construction and consumption drive the upswing The services sector once again saw the strongest growth. It expanded by 14.7% and benefited above all from trade, logistics, digital services and tourism. Industry also developed solidly: excluding the construction industry, growth amounted to 6.8%. The construction sector itself even grew by 14.2 percent, driven by investments in residential construction and infrastructure. Even agriculture, which often grows at a slower rate, recorded an increase of 4.4 percent. For the ADB, it is clear that domestic demand remains the backbone of this growth. The real income of private households rose by 9.2% in 2025. At the same time, investments increased by 10.5 percent. Capital flowed primarily into industry, logistics, construction projects and urban development. This dynamic was driven by corporate funds, household savings and foreign direct investment. Consumption also continued to rise. Cashless online sales rose sharply, as did revenue from retail and financial services. This demonstrates that the Uzbek economy is not only thriving on individual large-scale projects, but also on broader economic activity within the country. ADB Country Director Kanokpan Lao-Araya therefore believes that the country is in a comparatively strong starting position. The real challenge now is to turn the current momentum into more productive, more private sector-led growth. Solid data - but not a sure-fire success For 2026 and 2027, the ADB expects slightly lower but still very high growth of 6.7 and 6.8 percent respectively. However, these forecasts are based on assumptions that were made back in March - at a time when many observers were still expecting the situation in the Middle East to stabilize soon. In the meantime, this hope has become much more fragile. This means that the external framework on which parts of the forecast are based is also subject to change. Nevertheless, the macroeconomic data initially shows an improvement. Inflation fell faster than expected to 7.3% in 2025, compared to 9.8% in the previous year. Tighter monetary policy, a firmer exchange rate and falling cost pressure contributed to this. Inflation is likely to slow further in the coming years. The ADB is forecasting 6.5% in 2026 and a gradual approach to the central bank's inflation target of 5% by 2027. However, this is not entirely risk-free: higher energy tariffs or problems with food supplies could slow down disinflation. The budget situation also developed more favorably. The deficit fell from 4.0 to 2.1 percent of gross domestic product, although the state did not reduce its social spending. At the same time, foreign trade improved: exports rose sharply, remittances from migrant workers increased significantly and the current account deficit fell to around 2.5 percent of GDP. Foreign currency reserves remained at a high level, supported by income from trade, tourism and remittances. Dependence on gold and pressure to reform remain However, this is where the second, less comfortable side of the outlook begins. Despite all the progress made, Uzbekistan remains heavily dependent on gold exports. The precious metal accounted for almost a third of total exports last year. This means that the economy remains vulnerable to fluctuations on the commodities markets. The ADB therefore makes it clear what is important now: faster reform of state-owned enterprises, more modern regulation and rapid accession to the World Trade Organization. Joining the WTO could institutionally secure reforms, increase competitiveness and attract higher-quality investments. Without these steps, growth threatens to remain high but structurally less resilient. In addition, there are the familiar external risks: volatile financial markets, uncertainty in global trade, possible burdens from the state sector and ongoing geopolitical tensions. All of this can severely affect a country like Uzbekistan, which relies heavily on openness, capital inflows and stable framework conditions. Nevertheless, Uzbekistan remains in a good position in a regional comparison. For Central Asia as a whole, the ADB expects growth of 4.2 percent in 2026 and 4.4 percent in 2027. Uzbekistan is therefore growing well above the regional average - and remains one of the region's most important drivers. The post ADB sees Uzbekistan continuing to grow appeared first on ostwirtschaft.de.