Uzbekistan Quality Job Creation as a Cornerstone for Sustainable Economic Growth

Uzbekistan Quality Job Creation as a Cornerstone for Sustainable Economic Growth
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headcount at the national poverty line declined from 27.5% in 2001 to about 
13.7% in 2015 (CER 2015).
There has been a structural shift in production away from agriculture, whose 
share of GDP was 32.4% in 2018 versus 50.0% in 1993–1995 (Figure 1.4). The 
share of services increased from 28.1% in 1993 to 35.6% in 2018, while that of 
manufacturing gew from 17.1% to 26.3% over the same period. 
Figure 1.3: GDP per Capita, 1993–2018
(2011 PPP $)
GDP=gross domestic product, PPP = purchasing power parity.
Source: World Bank. World Development Indicators. http://www.databank.worldbank.org/ (accessed
11 November 2019).
GDP = gross domestic product.
Notes: Percent (%) based on GDP at current basic prices. Manufacturing includes mining and quarrying, 
and electricity, gas, steam and water.
Sources: ADB. Statistical Data Base System. https://www.adb.org/data/sdbs (accessed 11 November 2019) 
and Uzbekistan Statistics. http://stat.uz (accessed 11 November 2019).
2011 PPP$
2,000
2,500
3,000
3,500
4,000
4,500
5,000
5,500
6,000
6,500
1993
1998
2003
2008
2018
2013
Agriculture
Manufacturing
Construction
Trade, accommodation,
and food services
Transport, communication,
and storage
Other services
Percent
0
20
40
60
80
100
1993
1997
2001
2005
2009
2013
2017
Figure 1.4: GDP by Economic Activity, Uzbekistan, 1993–2018
(%)

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 Macroeconomic Performance, Opportunities, and Challenges
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Uzbekistan has maintained stable, as officially reported, single-digit inflation 
rates since 2004 (Figure 1.5). Even during the commodity price boom years 
(2004–2014), annual inflation never exceeded 8%. After the boom, the 
economic slowdown led to a concomitant decline in the inflation rate, to 
5.5% in 2015 and 5.6% in 2016. In early 2018, however, inflation jumped to 
almost 20%. This was predominantly due to the exchange rate unification in 
September 2017 as well as the loosening of both fiscal and monetary policies. 
In response, the Central Bank of Uzbekistan (CBU) tightened monetary policy 
by selling monetary gold and increasing the refinancing rate from 14% to 16% 
in September 2018. The inflation rate subsequently declined resulting in an 
annual average of 17.5% in 2018. 
Whether these recent measures will be sufficient for inflation to return 
to single digits is unclear. Pressure on the sum to depreciate is ongoing.
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Furthermore, monetary transmission via the interest rate channel is weak 
in Uzbekistan (Hespeler 2013). Inflation is thus likely to persist and may 
only gradually decline in 2019/20. In the future, the monetary transmission 
channel will need strengthening to tame inflation more effectively. The CBU’s 
recent effort to develop the government bond market is a first step in the right 
direction. A strong monetary transmission process will also be a key ingredient 
to the CBU’s planned adoption of inflation targeting over the medium term 
(IMF 2018). In the meantime, further structural reforms aimed at promoting 
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Interview with Central Bank of Uzbekistan, 4 October 2018.