Uzbekistan Quality Job Creation as a Cornerstone for Sustainable Economic Growth

Table 1.2: External Indicators, Uzbekistan, 2005–2018
 
2005 2010 2013
2014 2015
2016
2017
2018
Foreign direct investment
($ million)
191.6 1,636.4 634.7 757.4 66.5 134.1 97.7 412.4
External debt outstanding
(% GDP)
27.1
16.6
15.5
17.3
18.1
19.9
29.9
34.9
Remittances ($ million)
...
2,858 6,689 5,653 3,059 2,741 3,901 2,801
... = no data, GDP = gross domestic product.
Sources: For gross official reserves and external debt outstanding, ADB (2018) and IMF (2018); for remittances, 
World Bank. World Development Indicators. http://www.databank.worldbank.org (accessed 11 November 2019); 
for foreign direct investment, UNCTAD. http://unctad.org/en/Pages/statistics.aspx (accessed 11 November 2019).

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 Macroeconomic Performance, Opportunities, and Challenges
17
The unification of the exchange rate is likely to mark a structural break in the 
external sector’s performance. The availability of foreign exchange meant 
that the demand for imports was no longer compressed. The merchandise 
trade deficit has widened substantially, from 3.8% of GDP in 2017 to 13.6% 
in 2018. However, after years of restrictions on imports, this development 
is not surprising. Once the backlog in imports has cleared, the trade deficit
should narrow. 
Remittances have declined continuously, from $6.7 billion in 2013 to 
$2.7 billion in 2016, before recovering slightly to $3.9 billion in 2017
(Table 1.2). In 2018, remittances declined again to $2.8 billion, resulting in a 
current account deficit of 7.1% of GDP. 
The removal of foreign exchange controls and the concomitant current 
account deficit has put pressure on Uzbekistan’s foreign exchange reserves. 
Between September 2017 and October 2018, they declined by $1 billion, from 
$27.5 billion to $26.4 billion (Figure 1.14). This level of reserves is still adequate, 
as it translates to about 18 months of imports, well above the conventional rule 
of thumb that suggests 3 months of imports.
9
Overall, Uzbekistan’s external 
position can be summarized as healthy despite the recent emergence of a 
current account deficit. However, should the deficit exceed 5% of GDP for a 
sustained period, further assessment will be needed, as this might be a cause 
for concern.
9
A new consensus has emerged that the 3 months of imports rule of thumb is inadequate in an era of financial 
globalization due to volatile capital flows (e.g., Athukorala and Warr 2002). However, Uzbekistan has low 
levels of external debt and is not well integrated into world financial markets, so the conventional rule still has
merit here. 
Sources: For 2013-2017: Uzbekistan Statistics. http://stat.uz (accessed December 2018); for 2018: Central 
Bank of the Republic of Uzbekistan. http://www.cbu.uz/en/statistics/intlreserves/ (accessed 11 November 
2019).