Uzbekistan’s Strong Economic Foundation
Uzbekistan is quickly becoming an exciting frontier market, with large reforms building upon an existing strong economic foundation.
Uzbekistan has plentiful natural resources, with large reserves of gold, copper and hydrocarbons, and enjoys favourable climate conditions for agriculture production
The country has large FX reserves, equal to more than 60% of GDP and covering 20 months worth of imports at the end of 2017, and government debt-to-GDP is low, currently around 25%, and total external debt less than 50% of GDP Moreover, there is limited use of financial institutions at the moment on a corporate and consumer level, which presents an opportunity for increased leverage within the economy
Uzbekistan is strategically located at the heart of Central Asia, bordering all the other ‘stans and at the centre of China’s Belt and Road Initiative investment
Uzbekistan’s demographics offer both a plentiful supply of cheap labour and a growing consumer population. With 32 million people it is the largest population in Central Asia (CIA Factbook), of whom 50% are below the age of 25 and education rates are high, with literacy levels close to 100% (UNESCO Institute of Statistics)
Combined with this the economy is forecast to grow rapidly from a low base: GDP-per-capita in 2018 was only $1,262, compared to over $4,000 in Georgia and $9,000 in Kazakhstan (IMF) and GDP growth is forecast to be more than 5% through 2024, nearly doubling GDP per capita to $2,223 (IMF).
Favourable demographics and high economic growth, together with the ongoing reforms, present unique opportunities for private sector businesses to meet growing domestic demand and target export opportunities regionally and further afield
The combination of demographics and low GDP base is comparable with East Asian economies that underwent similar transitions and subsequent extended periods of economic growth.