Uzbekistan’s economic outlook remains positive

78-year-old President Islam Karimov has died after he has headed Uzbekistan for 25 years. A former leader of the Communist Party when Uzbekistan was still a Soviet republic, Karimov has been its unique ruler since independence in 1991, that’s why the just starting unprecedented political transition could be significant for the gold-, minerals- and energy-rich country. “Uzbekistan, with the goal of becoming an industrialized, upper-middle-income country by 2030, is continuing to make transition steps towards a more market-oriented economy.”

Populated with approximately 31.5 million citizens and ranked 70th in PPP GDP rank, Uzbekistan’s economic growth has been leading along with Turkmenistan’s among Central Asian countries reaching 8% in 2015 and likely stabilizing at 7.3% in 2017, that is 4.5 percentage points above regional average thanks to rising public investment and spending. A close ally of Russia, Karimov has managed to diversify Uzbekistan’s foreign relations by building significant trade ties with Switzerland, Turkey and Germany.

Seeking a counterweight to longstanding Russian influence in the country, Uzbekistan now imports a similar amount of goods from both Russia and China while China has become a client twice as big as Russia for Uzbek exports. Despite commodities’ low prices and political uncertainty, the outlook for Uzbekistan’s economy is mostly positive with only 7.5% of GDP in public debt and foreign reserves amounting to twice the gross external debt (USD 18 billion compared to USD 9 billion).

From a political standpoint, aside from Karimov’s second wife Tatyana Karimova, Western analysts have deemed unlikely in Uzbekistan’s future a prominent role of the Karimov family whose many members have lived abroad for a long time. Instead, Prime Minister Shavkat Mirziyae, National Security chief Rustam Inoyatov and Finance Minister Rustam Azimov have been identified as potential successors of Karimov.