TASHKENT, April 3 (Xinhua) -- Uzbekistan's economic growth would improve to 5.2 percent and inflation will decelerate to 16 percent in 2019, Asian Development Bank (ADB) said in a report released on Wednesday.
The gross domestic product (GDP) growth for Uzbekistan is projected at 5.2 percent in 2019 and 5.5 percent in 2020 by ADB, following 5.1 percent in 2018.
High infrastructure spending, an improved investment climate, increased exports, and expected agriculture pickup are helping Uzbekistan sustain its growth, ADB said in the report.
However, the country's economy remains challenged by persistent credit expansion, accelerated inflation, and a widening current account deficit, according to the bank's Asian Development Outlook (ADO) 2019.
Investments are expected to remain the major growth driver for 2019, reflecting further improvement of the investment climate and government-led investments to modernize manufacturing, mining, power generation, transportation and housing, the report said.
ADB experts forecasted that inflation is expected to decelerate to 16 percent in 2019 and further to 14 percent in 2020 as lending growth under state programs slows and customs procedures are further streamlined resulting in increased imports.
Inflationary pressure will persist due to a rise in energy prices last November, further hike in electric power and natural gas prices in June 2019, consequent adjustments to pensions and wages and upwards revisions to customs duties on imports, the report said.
The annual report suggests prioritizing reforms in irrigation, which faces challenges stemming from land degradation and water shortages, and recommends developing a long-term sector strategy, incorporating climate change adaptation and mitigation, farmers' access to extension services and finance, and securing land tenure.
Uzbekistan should also promote water resources management and climate proofing across borders, it said.
Since joining ADB in 1995, Uzbekistan has committed 70 loans totaling 7.4 billion U.S. dollars, including two private sector loans totaling 225 million dollars.