Development finance assessment

Public spending
Uzbekistan’s government spending is higher than in most of its relevant comparators, 
split equally between outlays on-budget and off-budget. Consolidated government was 
estimated at 31.2 percent of GDP in 2019 and projected at 28.6 for 2020 (IMF, 2020)
Large off-budget spending is a significant challenge to efficient and transparent public 
spending. The spending off-budget includes outlays by the remaining EBFs
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; the off-budget 
accounts of budgetary organizations; government investment spending financed by foreign 
project loans; policy lending by the UFRD, the government, and foreign lenders; and estimates 
of the quasi-fiscal losses of SOEs. In 2020, for the first time the Budget Law included 18 state 
targeted funds, along with the resources of the UFRD (compared to only 3 state targeted 
funds in 2019).
With the public sector being a large employer in Uzbekistan, wages represent the largest 
share of on-budget spending, accounting for almost half of the government budget and 
close to 11 percent of GDP. As concerns about the fiscal affordability of the wage bill have 
increased, the authorities are planning to reform public employment and human resource 
management to deliver more effective public services at more affordable cost. At the heart 
of these issues is a generally weak civil administration, especially at the local level. Without 
accompanying capacity-building this limited administrative capacity constitutes a binding 
constraint to the effective implementation of potential SDG financing solutions.
In 2018, almost a year after the start of reforms, budget spending rose substantially and 
reflected an increase in on-budget public infrastructure outlays and larger disbursements for 
social programs and rural development (WB, 2019). Public investment amounted to 4.0 percent 
of GDP in 2019 (IMF, 2020), with just under half of it on-budget. Most off-budget investment 
funding in the last two years has come from IFIs and bilateral creditors, such as China. 
A lack of data allows only a limited analysis of the economic classification of government 
spending: