Uzbekistan Adopts Deficit Budget in Rare Admission of Trouble
Uzbekistan’s upper house of parliament, the Senate, on December 13 adopted the 2017 budget with a deficit equivalent to 1 percent of gross domestic product — a rare if marginal acknowledgement of the country’s economic struggles.
That deficit amounts to 2.4 trillion sum, or around $750 million.
The budget was initially presented to lower house of parliament by deputy prime minister Rustam Azimov, who also fulfils the position of finance minister.
Last year’s budget was also adopted with 1 percent to GDP deficit, then around $650 million.
The scale of the reported deficit is eminently manageable by the standards of Western economies, but it is the gesture of transparency that it noteworthy in this instance. The government tentative efforts at privatisation programs and drumming up foreign investment are sorely constrained by common perceptions that Uzbekistan’s is mired in corruption and hampered by opaque bureaucratic practices.
It is likely that authorities understand that it is misguided to continue talking up claims of unalloyed success when everything around screams economic malaise.
Azimov provided no details about how the deficit is to be covered.
Uzbek economist Yuliy Yusupov sugested it would be done through a combination of loans and cash emissions.
“Considering that in Uzbekistan the real rate of inflation is far higher than what is officially declared, we run a significant deficit that we cover by printing money. What the real situation is, it is impossible to say, since all the relevant information about the budget and cash emissions is kept secret,” Yusupov told EurasiaNet.org.
According to official figures from 2015, Uzbekistan’s debt-to-GDP is 18.5 percent, which is extremely low by Western standards.