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Uzbekistan’s GDP growth reaches 8%, inflation 3.6%

Thursday 18 August 2011

Uzbekistan’s Ministry of the Economy and the State Statistics Committee (Goskomstat) published the results of socio-economic development of the country over the first half of 2011.

Uzbekistan’s GDP growth has amounted to 8% compared to the same period last year, according to CA-NEWS. The volume of industrial production increased by almost 7%, agriculture by 6.5% and investments by 4.5%. Retail turnover grew by 14.5%. The state budget was executed with a surplus. The chemical and petrochemical industry, machine building and metalworking, food processing and metallurgy industries were the most dynamically developing ones during the reporting period. During the first six months of the year, 509 projects in the production of food and non-food products were implemented. The foreign exchange trading platform held transactions worth more than US$ 100 million with an increase in exports by 1.5 times against the same period in 2010.

Meanwhile, the released data shows that inflation in the first half of this year was 3.6%, compared with the figures seen in larger European economies. The cost of goods and services increased by 12.27% in the first half of 2011 – in mid-January, a selection of consumer goods and services cost 202,195 sums in Tashkent, with the same range of goods and services increasing to 227,010 sums by mid-June. An anonymous envoy of a leading Tashkent consulting company said that in actual fact inflation is higher than 12.27%. “This is because your list does not include many goods for which prices have risen by much more than this,” he added.

The deteriorating business climate in Uzbekistan was held responsible for the soaring inflation figures particularly for small- and medium-sized enterprises (SMEs), which according to official statistics, generated 42.2% of Uzbekistan’s GDP in the first half of this year. SMEs in Uzbekistan are facing tough challenges – the worsening business climate is more affected by higher production costs, which are passed on in higher prices to the consumer. The stringent policies to restrict money supply and the public’s buying power have also failed to control inflation. An expert source said: “However hard the government tries to persuade people to spend less, even if people have all their spare cash taken away and cannot pay for goods and services with credit cards, production costs will continue to increase and this will be reflected in the growth of prices for consumers, so inflation will go up whatever.”

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