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Uzbekistan’s economy to grow 8 percent in 2013

Uzbekistan

Uzbekistan

Uzbekistan gross domestic product (GDP) is projected to grow 8 percent in 2013 the government sources said today. Uzbekistan’s President Islam Kerimov said that an 8 percent economic growth is foreseen for 2013. President Kerimov said that an 8 percent economic growth is foreseen for 2013, adding that industrial production is planned to grow by 8.4 percent , agricultural sector by 6 percent, investment volume by 11 percent and services sector by 16 percent.

Kerimov said that strict monetary and loan policy will be implemented this year too, and yearly inflation rate for 2013 is expected to be 7-9 %.

The World Bank said Uzbekistan’s GDP grew 8.2 percent in 2012. The Central Asian country’s economic growth is expected to reach 7 percent and 6.8 percent in 2014 and 2015 respectively. to US government Uzbekistan is a dry, landlocked country; 11% of the land is intensely cultivated, in irrigated river valleys. More than 60% of the population lives in densely populated rural communities.

Uzbekistan conjures up images of a time of oriental mystery, a time when the now ancient cities of Uzbekistan were located on the ancient Silk Road, the trading route between China and the West. The route took its name from silk, the commodity most in demand in Europe from China during the Roman period. Some of the most influential and savage conquerors came and ruled these lands.
Alexander the Great set up at least 8 cities in Central Asia between 334 – 323 BC before the caravans began traveling through the Silk Road after around 138 BC China opened its border to trade.

Between 484 – 1150 Huns and Turks came from the west and brought with them a new religion of Islam. Many mosques and Madrassahs were built in Uzbekistan cities of Samarkand, Bukhara and Khiva during this period, including remaining structures of the Samanids. Most of the cities were destroyed during the invasion of the Genghis Khan in 1220. His descendant Timur, known also as Tamerlane, resurrected once famous cities by using the labor of slaves and artists captured during successful crusades. Timur conquered Persia, captured Baghdad, and lead expeditions to Anatolia and India. Most of the architecture that is found in Samarkand was build by Timur and his grandson Ulugbek.

Uzbekistan is bordered by Afghanistan, Kazakhstan, Kyrgyzstan, Tajikistan and Turkmenistan The geography of Uzbekistan is mostly flat-to-rolling sandy desert with dunes, as well as broad, flat intensely irrigated river valleys. Fergana Valley in east is surrounded by mountainous Tajikistan and Kyrgyzstan.

Export of hydrocarbons, primarily natural gas, provided 18.5% of foreign exchange earnings in 2011 and 35.1% in the first nine months of 2012. Other major export earners include gold and cotton. Despite ongoing efforts to diversify crops, Uzbekistani agriculture remains largely centered around cotton production, although productiion has dropped by 35% since 1991. Uzbekistan is now the world’s fifth largest cotton exporter and sixth largest producer; Uzbekistan is aggressively addressing international criticism for the use of child labor in its cotton harvest. Following independence in September 1991, the government sought to prop up its Soviet-style command economy with subsidies and tight controls on production and prices. While aware of the need to improve the investment climate, the government still sponsors measures that often increase, not decrease, its control over business decisions.

A sharp increase in the inequality of income distribution has hurt the lower ranks of society since independence. In 2003, the government accepted Article VIII obligations under the IMF, providing for full currency convertibility. However, strict currency controls and tightening of borders have lessened the effects of convertibility and have also led to some shortages that have further stifled economic activity. The Central Bank often delays or restricts convertibility, especially for consumer goods. According to official statistics, Uzbekistan has posted GDP growth of over 8% per year for several years, driven primarily by state-led investments and a favorable export environment.

Growth may slip in 2013 as a result of lower export prices due to the continuing European recesssion. In the past Uzbekistani authorities have accused US and other foreign companies operating in Uzbekistan of violating Uzbekistani tax laws and have frozen their assets, with several new expropriations in 2012. At the same time, the Uzbekistani Government has actively courted several major US and international corporations, offering attractive financing and tax advantages, and has landed a significant US investment in the automotive industry, including the opening of a powertrain manufacturing facility in Tashkent in November, 2011. Uzbekistan has seen few effects from the global economic downturn, primarily due to its relative isolation from the global financial markets.