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- GDP (PPP):
- $104.7 billion
- 8.0% growth
- 8.4% 5-year compound annual growth
- $3,555 per capita
- Inflation (CPI):
- FDI Inflow:
Uzbekistan’s economic freedom score is 46.5, making its economy the 163rd freest in the 2014 Index. Its score is 0.5 point higher than last year, with improvements in business freedom and the control of government spending outweighing declines in freedom from corruption and labor freedom. Uzbekistan is ranked 37th out of 42 countries in the Asia–Pacific region, and its overall score is much lower than the world average.
Uzbekistan was first ranked in the Index in 1998. Since then, its economic freedom score has advanced by about 15 points, one of the top 20 improvements. Overall improvement has been driven by gains in six of the 10 economic freedoms including monetary freedom, business freedom, and fiscal freedom. However, property rights and investment freedom have declined by 15 points or more over the country’s history in the Index.
Uzbekistan remains economically “repressed.” Pervasive state controls persist in many areas, stifling progress in the development of a modern diversified economy. Corruption is widespread, and contract enforcement and protection of property rights are seriously deficient.
President Islam Karimov has held power since the late 1980s. Uzbekistan allowed NATO to use its Karshi-Khanabad air base after 9/11 but expelled all U.S. forces in 2005 and moved closer to Russia following Western criticism related to the Andijan incident, in which government troops shot and killed hundreds of Islamist protesters. Recently, relations with the United States and the European Union have improved due to cooperation in fighting Islamist terrorism. Uzbekistan left the Russia-dominated Commonwealth Security Treaty Organization in 2012. Rapprochement with Kazakhstan, if pursued, would shore up regional stability. Uzbekistan is a leading cotton producer and heavily dependent on natural gas, oil, gold, and uranium exports. It has secured a $2.54 billion loan from a consortium of private banks to build the Ustyurt gas and chemical complex.
The judiciary is subservient to the president, who appoints all judges and can remove them at any time. Court procedures fall short of international standards, and expropriation by powerful figures able to act with impunity is possible. Corruption is rampant. Property ownership, generally respected by local and central authorities, can be subverted by the government. There is no general system for registration of liens on chattel property.
The top individual income tax rate is 22 percent, and the top corporate tax rate is 9 percent. Other taxes include a value-added tax (VAT) and a property tax. The overall tax burden equals 20.2 percent of gross domestic income. Government expenditures amount to 31 percent of GDP. Public debt is below 10 percent of gross domestic income. The central government has reported a rare budget surplus due to expanding revenue collection.
Starting a business takes four procedures, and no minimum capital is required. However, completing licensing requirements still takes over 200 days. The labor market remains stagnant. A large portion of the workforce is in the informal sector. The government administers prices of many basic staples, such as petroleum products, natural gas, utilities, and bread.
The average tariff rate is 6.9 percent. It is very costly and time-consuming to import goods. It may be difficult for investors to access foreign currency. The government screens new foreign investment and restricts investment in many industries. Banking is dominated by state-owned banks and lacks competition and transparency. State-controlled banks support government economic priorities through subsidized loans offered in specific sectors.