From February 18 to March 5, an IMF mission took place in Uzbekistan, which addressed a number of problematic issues in areas such as taxation, monetary policy, the investment climate and rulemaking. The focus of the meetings was on recommendations for the country for 2019 in accordance with Article IV of the IMF Articles of Agreement.
Following the discussions, on March 5, the IMF Department of Public Communications posted on the Fund’s official website a closing statement, the main points of which are:
- It is recognized that Uzbekistan successfully completed the first stage of the economic regime, which consisted of reducing the tax burden, currency and customs restrictions, and the availability of economic statistics. The country's entry into the international securities market is welcomed and the confidence of foreign lenders is emphasized;
- The IMF believes that thanks to active investment, this year there will be a growth in GDP over the previous year, and steady growth in employment and wages is also expected. Inflation will remain at 15%. The general course of the fiscal policy was recognized as justified, the successful achievement of a positive budget balance of 0.5% of GDP was emphasized;
- Uzbekistan should focus on building the literate monetary policy, since as a result of sudden sharp growth in lending volumes and the inflow of capital goods imports may increase in the future inflationary pressure and lead to a large external deficit. It is recommended that the monetary policy rate remains tight, due to the need to keep liquidity at a level after raising the refinancing rate. In this regard, it is also necessary to restrain the growth of lending;
- It is indicated that the privatization process may to some extent adversely affect the public debt, since State-owned enterprises provide a large share of revenues to the budget and their reorganization may lead to a violation of this stability. Losses in income can be offset by expanding the tax base;
- It is necessary to continue the course of rebooting the tax and banking sectors. Among the main objectives of tax reform are the reduction of tax incentives and the equalization of taxes on the labor force of enterprises. In the banking sector, there was a need to adopt new versions of the laws "On the Central Bank" and "On Banks and Banking Activities", as well as reducing government funding for banks to reduce gaps in bank balance sheets.
In addition, a special survey was conducted among investors operating in Uzbekistan, who noted that the government should increase the availability of energy resources, segment the credit market and strengthen anti-corruption activities.
Of course, the results of the visit of the IMF delegation are extremely important for the competent formulation of a strategy for the further development of the country.