Front Matter

Front Matter Page

© 1998 International Monetary Fund

October 1998

IMF Staff Country Report No. 98/116

Republic of Uzbekistan: Recent Economic Developments

This Recent Economic Developments report on the Republic of Uzbekistan was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with this member country. As such, the views expressed in this document are those of the staff team and do not necessarily reflect the views of the Government of the Republic of Uzbekistan or the Executive Board of the IMF.

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Front Matter Page



Recent Economic Developments

Prepared by a staff team consisting of Mr. Keller (Head), Mr. Coelho, Mr. Taube (all EU2), Mr. Bogetić (FAD), Ms. Murgasova (PDR), Mr. Zettelmeyer (RES), and Mr. Rosenberg (Resident Representative in Uzbekistan)1

Approved by European II Department

August 19, 1998


  • I. Understanding Uzbekistan’s Output Performance, 1992–97

    • A. Overview

    • B. Background

      • Initial Conditions

      • Investment Patterns and Industrialization Policies

      • Structural Policies

    • C. Elements of an Explanation

      • The Role of Output Measurement

      • The Role of “Special Factors”

      • A Sectoral View

    • D. Summary and Conclusions

  • Text Tables

  • 1. Baltics, Russia and Other Countries of the Former Soviet Union: Output Paths, 1992–97

  • 2. Saving and Investment Balances, 1995–97

  • 3. Official GDP and GDP Estimates Based on Electricity Consumption

  • 4. Uzbekistan and BRO Average: Fitted and Actual Growth Paths

  • 5. Uzbekistan and BRO Average: Fitted and Actual Growth Paths

  • 6. Uzbekistan and BRO Average: Contributions of Major Groups of Variables to Fitted Growth

  • 7. Real GDP Growth, 1992–97

  • 8. Sectoral Contribution of Nominal GDP at Current Market Prices, 1993–97

  • 9. Production of Selected Industrial Products, 1991–97

  • Figures

  • 1. Uzbekistan and Other Transition Economies: Output Paths

  • 2. Real GDP Index by Sector

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Uzbekistan: Basic Data

Social and Economic Indicators
Area (square kilometer)447,400
Population (million, 1997)23.7
Urban (percentage, 1995)41
Population growth rate (percent, 1995)1.89
Infant mortality rate (per 1,000 live births, 1995)43
Life expectancy at birth (1995)
Adult literacy rate (1995)

Sources: Ministry of Macroeconomics and Statistics, Ministry of Finance, and Central Bank; U.N. Statistics Division; and Fund staff estimates.

Excluding valuation adjustments.

Data for 1995-97 are not fully comparable with previous years due to the introduction of new statistical methodology.


This report was prepared as background for the 1998 consultation between the International Monetary Fund and Uzbekistan, under the provisions of Article IV of the IMF’s Articles of Agreement. The report covers mostly economic developments through 1997 and, when available, the first half of 1998.2

Chapter I analyzes economic growth in Uzbekistan during the transition, including its sectoral dimension. It compares growth in Uzbekistan with that of other transition economies and seeks to shed light on why Uzbekistan has suffered a smaller transformational recession than other transition economies. The report covers in Chapter II the existing arrangements for production and trade in agriculture, and estimates the costs for agriculture arising from state procurement and the multiple exchange rate system. Chapter III traces the effects of multiple exchange rates and other quasi-fiscal operations on the economy as a whole, including for industry, banks, consumers, and the budget. Finally, Chapter IV summarizes recent developments in employment, prices and wages, public finance, banking and monetary policies, external trade, balance of payments, as well as structural reforms, including the development of financial markets and the private enterprises.

A set of statistical tables updates available economic data series.


  • II. Agricultural Producer Price Policies and Marketing Arrangements

    • A. Introduction

    • B. Agricultural Performance

    • C. Property Rights Reforms

    • D. Producer Price Policies and Marketing Arrangements

    • E. Subsidies

    • F. Conclusions

  • Text Tables

  • 10. Production of Selected Agricultural Products, 1991–97

  • 11. Sectoral Shares in Investment, 1995–97

  • 12. Cotton World Production and Exports, 1992/93–1997/98

  • 13. Cotton and Wheat Indicators, 1991–97

  • 14. Cotton and Wheat Producer Prices, 1994–97

  • 15. Cotton and Wheat Taxation and Support, 1995–97

  • Figures

  • 3. Average Wages, 1991–97

  • 4. Agricultural Producer Prices, 1995–97

  • Text Boxes

  • 1. Cotton and Labor

  • 2. Cotton Cultivation and its Environmental and Social Implications

  • 3. Agricultural Financing Through the Pakhta Bank

  • III. Quasi-Fiscal Operations through the Foreign Exchange System

    • A. Introduction

    • B. Background and Summary of the Current System

      • Main Distortionary and Distributional Effects

      • Effect on Agriculture and Other Exporting Sectors

      • Effect on Investors and Other Importers

      • Effect on Households

      • Effect on Commercial Banks

      • Effect on the Government Sector: Quasi-Fiscal Operations of the Central Bank and the Fiscal Budget

    • C. Concluding Remarks

  • Text Tables

  • 16. Gains and Losses from Current Multiple Exchange Rate Practices and Marketing System

  • Figures

  • 5. Gains and Losses from Multiple Exchange Rates

  • Text Boxes

  • 4. Sources and Uses of Foreign Exchange

  • 5. Multiple Exchange Rates

  • IV. Recent Economic Developments

    • A. Economic Activity, Prices, Wages, and Employment

      • Economic Activity

      • Inflation

      • Wages and Employment

    • B. Recent Fiscal Developments and Fiscal Policy Measures

    • C. Monetary Policies and the Financial Sector

      • Interest Rates

      • The Banking Sector

      • Banking Regulation and Supervision

      • Financial Sector Development

    • D. External Trade and Payments and the Exchange System

      • Balance of Payments—Main Developments

      • Merchandise Trade

      • Developments in Trade with Traditional and Nontraditional Trading Partner Countries

      • External Credits and Debt

      • Exchange Rate Policy Management

      • Trade System

      • Foreign Exchange System—The Present System

      • Recent Changes in the Exchange Regulations

    • E. Privatization and Private Sector Development

      • Case-by-Case Privatization

      • The Privatization Investment Fund (PIF) Scheme

      • Bankruptcy Proceedings

      • Problems of Small- and Medium-Enterprises in Uzbekistan

      • Business Registration

      • Cash Withdrawal Restrictions

      • Taxation

      • Inadequate Access to Credit

    • F. Relations with the International Monetary Fund

  • Text Tables

  • 17. Consumer Price and Producer Price Inflation, 1993–98

  • 18. Producer Prices, 1997–98

  • 19. GDP and Sectoral Deflators, 1992–98

  • 20. Electricity Consumption and Real GDP Growth, 1991–97

  • 21. Selected Energy Prices, 1995–98

  • 22. Energy Prices, 1996–98

  • 23. Monopoly Enterprises and Products, 1996–98

  • 24. Average Monthly Wages in the Public Sector, 1995–98

  • 25. Labor Market Indicators, 1991–97

  • 26. Public Sector Employment, 1992–97

  • 27. Fiscal Operations of Consolidated Government, 1994–97

  • 28. Reserve Money and Net Assets of the Monetary Authorities

  • 29. Central Bank Credit Outstanding, 1996–98

  • 30. Broad Money and Net Assets of the Banking System

  • 31. Yield of Government Bonds in Primary and Secondary Markets, 1996–98

  • 32. Bank Interest Rates on Loans in Sums, 1996–98

  • 33. Bank Interest Rates on Deposits in Sums, 1996–98

  • 34. Balance of Payments, 1992–97

  • 35. Crude Oil and Oil Products Energy Balance, 1993–97

  • 36. Non-Oil Energy Balances, 1993–97

  • 37. Total Trade with Traditional Trading Partners, 1992–97

  • 38. Total Trade with Nontraditional Trading Partners, 1993–97

  • 39. Direction of Trade with Traditional Trading Partners, 1993–97

  • 40. Direction of Trade with Nontraditional Trading Partners, 1993–97

  • 41. Foreign Exchange Markets and Rates as of July 31,1998

  • 42. Corporatized and Partially Privatized Enterprises, 1992–97

  • Figures

  • 6. Real GDP Growth, Inflation, and Currency in Circulation, 1995–97

  • 7. Energy Pricing, 1995–98

  • 8. Real Average and Minimum Wage

  • 9. BRO Countries: Monthly Average Wages, June 1992-March 1998

  • 10. Selected Monetary Indicators, 1994–97

  • 11. Nominal Exchange Rates, April 30, 1996-August 7,1998

  • Text Boxes

  • 6. Measuring Inflation in Uzbekistan

  • 7. Pensions and Social Assistance Programs

  • 8. Monetary Developments in 1996–98

  • 9. How Banks are Taxed

  • 10. Outstanding External Debt by Creditor

  • 11. Import Tariff Regime

  • 12. Trade Related Exemptions

  • 13. Foreign Exchange Flows

  • 14. A Crucial Problem for Small- and Medium-Enterprises: Lack of Access to Foreign Exchange

Uzbekistan: Recent Economic Developments
Author: International Monetary Fund