An International Monetary Fund (IMF) mission led by Mr. Albert Jaeger visited Tashkent during November 7–16, 2017, to discuss the authorities’ plans to continue reforms of the economy and to update the macroeconomic framework.

At the conclusion of the visit, the mission issued the following statement:

“The mission welcomed the authorities’ continued efforts to adopt a more effective macroeconomic stabilization framework and to improve the economy’s investment climate, in line with the priorities of the development strategy of the President of the Republic.

“The mission noted that the liberalization of the foreign exchange market in early-September was a significant first step, which seemed to be welcomed by all stakeholders.

“The authorities expressed their determination to follow up on the foreign exchange reform by liberalizing most prices, restructuring state-owned enterprises, and removing remaining bottlenecks to international trade and foreign direct investment.

“The mission noted that the next reform steps should aim at improving the investment climate and protecting the vulnerable segments of the population.

“Improved international commodity prices and trading partner growth will provide a favorable backdrop to the authorities’ reform efforts.

“Growth prospects remain broadly favorable, but there are risks to growth during this phase of economic transformation, as earlier experiences of other transition economies suggest.

“The mission welcomed the authorities’ focus on keeping inflationary pressures in check. To be able to more effectively control inflation, the Central Bank of Uzbekistan (CBU) is overhauling its monetary framework and is enhancing its operational capabilities.

“The mission also welcomed the authorities’ intention to allow the nominal exchange rate to respond to fundamental shifts in the supply and demand for foreign exchange. Further steps to liberalize transactions in the foreign exchange market would be welcome.

“Fiscal policy will have to continue to play the leading role in stabilizing the economy. In this context, the mission noted that it will be important that fiscal policy, defined as including all on- and off-budget operations, will need to remain tight going forward to help contain inflationary pressures.

“Following the liberalization of the foreign exchange market, the banking system remains well-buffered. But there was agreement that banks’ asset quality and liquidity needs to be monitored carefully, especially against the backdrop of the restructuring of the large state-owned enterprise sector.

“The mission welcomed the first concrete steps toward improving the quality and transparency of economic statistics. A new consumer price index measure, aligned with international standards, will be used to measure inflation from February 2018 onward. Uzbekistan has also progressed toward joining the IMF’s enhanced General Data Dissemination System (E-GDDS).

“The mission thanks the authorities for their usual warm hospitality and for especially constructive discussions.”