External debt works for the economy
UzLiDeP and its faction in the Legislative Chamber of the Oliy Majlis, especially in the period of countering the coronavirus pandemic, continue to pay close attention to organizing a direct dialogue with residents of all regions.
At meetings with party activists and voters in compliance with all sanitary and hygienic requirements via videoconferences, the current issues of implementation of priority measures to combat coronavirus, to reduce the negative impact of the pandemic on economic sectors are raised. Against the background of a slowdown in growth and an intensifying crisis in the global economy in the first half of 2020, the volume of the country’s GDP in current prices amounted to 255.3 trillion UZS, or 0.2 percent compared to the same period last year.
As a result of measures taken to prevent the spread of the new infection, the execution of the State budget revenues for six months of 2020 amounted to 58.2 trillion UZS, or 45.3 percent in relation to the approved annual parameters. During the reporting period, an increase in the inflow of funds was achieved by 15 percent compared to the same period last year.
The main factor contributing to the increase in costs became the financing of measures to prevent the spread of coronavirus infection, social support for the population in a pandemic, as well as entrepreneurship, ensuring sustainable functioning of various sectors of the economy. In particular, as of July 1, funds for 5.6 trillion UZS were allocated from the Anti-Crisis Fund. Thanks to the measures taken to support the population and business entities during the coronavirus pandemic, 7,669 small business entities and individual entrepreneurs received preferences in the amount of 132.7 billion UZS for extending the deadline for paying taxes on property, land and water until October 1, 2020.
International structures also give positive assessments of the state of Uzbekistan’s economy. The macroeconomic report of the European Bank for Reconstruction and Development (EBRD) notes that by the end of the year, Uzbekistan will record GDP growth of 1.5 percent, despite the global economic slowdown caused by the outbreak of the coronavirus pandemic. The bank further predicts the growth of Uzbekistan’s economy at 6.5 percent in 2021 amid a recovery in exports and growth in domestic demand.
Party activists and deputies from UzLiDeP are tracking figures on the state of Uzbekistan’s external debt. In particular, according to the Ministry of Finance of Uzbekistan, in the first half of 2020, the external debt of the country increased by $1.6 billion, or 10.5 percent compared to the beginning of the year, and as of July 1 this year reached $17.31 billion, or 30.3 percent of GDP. The country’s domestic debt increased by 6.2 percent on an annual basis to $2.1 billion.
UzLiDeP believes that the growth of debt is an objective process of reforms, which Uzbekistan’s economy desperately needs, fully meets the interests of increasing the entrepreneurial activity of the population and increasing its income level. The World Bank estimates that measures taken by the government in 2017 to liberalize the economy are helping to remove restrictions on business. Earlier, according to the WB, the implementation of reforms in Uzbekistan was hampered by the lack of foreign exchange, high import duties and tax rates. The dynamics of public debt is explained by several factors, namely, the financing of strategic investment projects under government guarantees, the existence of agreements on external borrowing, the placement of government securities, the use of Eurobonds, and servicing public external debt.
UzLiDeP considers it important to continue the course towards ensuring financial stability in countering the coronavirus pandemic with a special focus on supporting the population and developing entrepreneurship. It is necessary to continue to ensure access of all segments of the population to medical services, medicines and food. In economic policy, it is required to ensure the efficient use of external debt, which will improve the overall economic situation of Uzbekistan, considering it as additional financial resources. Implementation of the borrowing policy should be accompanied by a clear understanding of public debt limits and stimulation of additional ways of filling the State budget.
Deputy Speaker of the Legislative Chamber of the
Oliy Majlis, Head of UzLiDeP faction