TASHKENT (Xinhua) — Uzbekistan’s economic outlook remains positive, with growth projected at 5.3% in 2019 and around 6% by 2021, according to the World Bank’s Economic Update for Europe and Central Asia, released Friday.

“Market reforms are expected to address production bottlenecks and liberalize high-potential growth sectors of the (Uzbek) economy, such as horticulture, tourism, food processing, textile, and chemicals”, the report said. “These will be supported by a significant reduction in 2019 of the business tax burden”, it said.

Inflationary pressures will persist in 2019-2020 due to further price reforms and wage increases, but the effects are expected to moderate by 2021, according to the report.

Steady economic growth and remittance income are expected to contribute to a modest pace of poverty reduction, the report said, adding that the changes in government policies may further expand support programs to the poor and vulnerable households and reduce poverty.

However, the bank warned of the Uzbek government’s reliance on a state-dominated economic model.

Uzbekistan has a population of over 33 mln. Despite reforms carried out since President Shavkat Mirziyoyev came to power in 2016, the country’s economy still remains reliant on a state-dominated economic model and traditional trading partners, like Russia, facing heightened external risks over the medium term, World Bank experts said.

While market reforms have begun to address these issues, the next phase of reforms aims to tackle more complex issues, such as the state-owned enterprises and the financial sector, agricultural reforms, and the privatization of non-agricultural land, the report said.

Meanwhile, the bank said in the update report that economic growth in Europe and the Central Asia region slowed to 3.1% in 2018, and is projected to decline to 2.1% in 2019, amid slowing global growth and uncertain prospects.