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On the Results of the Socio-economic Development of the Republic of Uzbekistan in the First Half of 2006

08-21-2006 01:25 PM CET | Business, Economy, Finances, Banking & Insurance

Press release from: The Embassy of Uzbekistan in Germany

/ PR Agency: Presservice of the Embassy of Uzbekistan in Germany
Undertaken measures on reforming the economy in priority sectors identified by the President of the Republic of Uzbekistan Islam Karimov have positively impacted entrepreneurial and investment environment during the accounting period, have promoted further structural transformation and ensured high rates of economic growth.

Macroeconomic trend

Basic macroeconomic indicators. Growth rates in all branches of real sector in the second quarter speeded up considerably and ensured GDP growth by 6,6 % as compared with the corresponding period of last year (equaling 3,6%). Economic growth was ensured due to an increase in investment by 6,9% (4,5%), industrial products by 9,7% (6,8%), agriculture by 7,2% (4,5%), trade by 11,6% (7,5%), services by 13,3 % (11,8%) and other sectors of economy.

Basic indicators of the socio-economic development of the Republic of Uzbekistan (% to the corresponding period of last year)

First quarter of 2006
Gross Domestic Product 103,6
Industrial production rates 106,8
Production of consumer goods 114,2
Gross production of agriculture 104,5
Construction efforts 103,6
Retail turnover 107,5
Public services 111,8

First half of 2006
Gross Domestic Product 106,6
Industrial production rates 109,7
Production of consumer goods 120,6
Gross production of agriculture 107,2
Construction efforts 106,1
Retail turnover 111,6
Public services 113,3

In accordance with the priorities set for the current year, monetary policy maintained macroeconomic stability due to strict adherence to forecast parameters of money supply, reduction of money circulation out of banks, improvement of national currency’s stability with simultaneous expansion of crediting in the real sectors of the economy.

As a result, inflation rate has not exceeded forecast parameters and equaled 3,5%. Overall balance of credit inflow into a real sector in comparison to the first half of last year increased by 10,5%, aggregate bank capital by 17%, public deposits in banks increased by 55,7%.

Fiscal policy was directed to ensure the balancing of budget income and expenditures with simultaneous reduction of tax burden to enterprises. Fulfillment of forecast influx onto State Taxation and Customs Committees made up 102,8% and 100,5% respectively. It ensured overfulfillment of budget income in comparison to forecasts by 2,4%. Overfulfillment of budget influx ensured timely and full financing of all expense items of budget. State budget was fulfilled with surplus.

In the first half of 2006 foreign trade turnover equaled $ 5059,3 million and increased 4,6 % in comparison to that of last year’s first half. Aggregate export increased by 5,2% and equaled $ 2971,2 million. Import equaled $ 2088,1 million (103,6% that of last year). Favorable balance of foreign trade turnover of $883,1 million was achieved.

II. Structural and Investment policy and development of real sector branches

Investment. Overall volume of investment to the republic on January – June 2006 including all sources of finance equaled 1624,6 billion soum or 44,1% of year’s forecast. In comparison to the same period of last year investment increased by 6,9% (5,4% in the first half of 2005). 63,4% of investment put in production construction.

Share of decentralized investment increased by 72,8% in comparison to that of 70% in the first half of 2005.

Basic growth of non-centralized investments has been provided through the increase of financing by the funds of enterprises – 26,8%, which has brought the share of this type of financing up to 48,3% as set against 40,4% in 2005.

In the accounting period, there have been completed a Shahpahty Mine development project on the PSA with the Russian “Gazprom”, commenced a PSA industrial development of Hauzak-Shady field with “Lukoil” company, being completed a number of projects in the textile industry: “Textileproduction”, second stage of the project on “Bitex Tijaret” JV. The projects on the construction of the Tashguzar-Boysun-Kumkurgan rail-road and “Uzbekistanskaya” electricity transmission line are being implemented at a rapid pace

The 40,1 billion sum reconstruction and major overhaul of highways have been completed (0,5% increase). In accordance with a planned schedule, 123 km of highways have been put into operation, 561,5 rm of bridges and overpasses have been reconstructed.

Industry:

High growth of industrial production has been due mainly to stimulating the manufacture of the finished and localized production in machine-building and metal-working, ferrous metallurgy, chemical, textile and food industries.

High growth rate have been achieved in machine-building and metal-working, chemical and petrochemical industries, building materials sector, electricity production, cotton-processing, knitwear and clothing, food, glass, china and ceramic production, medicine, and printing.

Sector-by-sector growth rates of industrial production (% against the same period of the previous year)

First quarter of 2006
Industrial output – 106,8
Including:
Electricity – 109,4
Fuel – 99,4
Ferrous metallurgy – 105,8
Non-ferrous metallurgy – 99,5
Chemical and petrochemical – 112,1
Machine-building and metal-working – 110,6
Forestry, wood-working and pulp and paper industry – 116,0
Building materials – 117,0
Textile – 106,8
Food – 120,9
Others – 119,6

First half of 2006
Industrial output – 109,7
Including:
Electricity – 107,6
Fuel – 100,1
Ferrous metallurgy – 106,8
Non-ferrous metallurgy – 100,8
Chemical and petrochemical – 116,9
Machine-building and metal-working – 119,8
Forestry, wood-working and pulp and paper industry – 118,0
Building materials – 118,8
Textile – 111,4
Food – 129,2
Others – 121,3

As a result of the increase of the use of production facilities there have been growth of the production of gas-condensate (105%), electricity (103,5%), coal (109%), steel (101,3%), cement (108,5%), automobiles (123%) etc.

Due to the measures to stimulate the production of consumer goods and support of entrepreneurship their manufacture has increased by 20,6% in January-June 2006. As compared to the same period of 2005 there has been an increase of production of refrigerators and freezers (by 5,4 times), washing machines (129,6%), TVsets (179,2%), nonalcoholic beverages (2,1 times), juices (129,0%), sugar (156,5%), macaroni production (125,6%), vegetable oil (114,3%), rugs and carpets (113,8%), china and ceramics (177,5%) etc.

On the implementation of the Localization Program, 675,3 billion sum worth of goods have been produced in January-June 2006. As compared to the same period of 2005 the production of localized goods has grown by 1,5 times. The effect of import-substitution – 562,7 million USD.

Measures on financial improvement of economically insolvent enterprises and liquidation of inefficient enterprises. 674 enterprises were subject to re-structuring and financial improvement, including 168 enterprises, whose programs were developed in the first half of this year. Of them 24 enterprises were subjected to the procedures of bankruptcy, 14 enterprises are removed from the register of legal entities in connection with their merge. Besides, 217 inefficient enterprises in the textile industry have been liquidated.

As a result of undertaken measures 450 enterprises were able to improve the parameters of industrial and financial activity (70 % of the total number), 328 enterprises (or 51 %) have increased volumes of production more than by 20 %, 98 (out of 187) have overcome economic insolvency, 62 (of 92) enterprises have become profitable, 89 new production units were set up within free capacities of restructured enterprises, 10331 jobs have been created and restored.

Trade and services. Acceleration of growth of industrial production, first of all, of consumer goods, promoted an increase in retail commodity circulation by 11,6 %. The growth trend in trade is maintained in all regions of the Republic.

The network of the enterprises of wholesale trade is expanded, the quantity of mini-banks and other objects of a market infrastructure is increased. The Association of the Enterprises of Wholesale Trade "Узулгуржисавдоинвест" (“Uzulgurjisavdoinvest”) set up nation-wide wholesale trading bases. There established 23 regional, district, inter-district wholesale bases to trade in goods.

Regional and branch programs of development in the sphere of services are elaborated and approved with target program measures and coordination of parameters developed at the branch, regional and republican levels. Quarterly targets were set to monitor results for 2006.

The volume of paid services rendered to the population in the first half of 2006 increased as compared with the same period of last year by 13,3 % and accounted for 889,1 billion UZS.

III. Implementation of the Privatization Program and development of the private sector

For the past period in line with the Program of Denationalization and Privatization 240 enterprises (107,1 % of set target) were privatized. The total value of recipts from denationalization and privatization made up 32,7 billion UZS, including 23,3 million USD from foreign investors (61,1 % of annual forecast).

Of 115 enterprises under the Program of selling at "zero" redemption cost, 108 units were put on tender trade and 107 units were sold with investment obligations worth 12,8 billion UZB.

In the first half of 2006 the cumulative turnover of the secondary securities market totaled to 92,31 billion USB, which is 2,8 times more than the same period of 2005. The ratio of the secondary market in the total value of sold shares accounted for 54,2 % (40,9 % of the same period last year).
Introduction of market mechanisms of selling material resources has allowed to generate 483 billion USB from realization of highly liquid products at the Uzbek Commodity Exchange. In addition highly liquid products worth 135,9 billion USB were sold (triple growth as of the first half of 2005 - 45,7 billion sums). In comparison with the first half of 2005 turnover of exchange export increased from 8,4 billion UZB up to 71,6 billion UZB (8,5 times).

Development of small business and individual entrepreneurship. Measures aimed at reducing the number of checks, introducing the legal mechanism of imposing the sanctions, simplifying the financial and time burdens of business registration procedures, the statistical and financial reporting made it possible to considerably increase the number of registered business entities (120,3 % as of the corresponding period of 2005).
In the first half of this year the sum of allocated credits of commercial banks to entities of small business and enterprises have made up 240 billion UZB, or 12 % more than the same period of last year. For the first half of 2006 the sum of credits allocated to entities of small business for formation of initial capital has increased by 20 % and made up 12,1 billion UZS as of July 1, 2006.

As a result the ratio of active small business enterprises has grown from 85,6 % up to 90,1 %, while the share of small business in the country’s GDP totaled to 34,1 %, which is 3,2 percentage points more than in the same period of 2005. 196 thousand jobs were created in the sphere of small business and individual entrepreneurship.

IV. Deepening of economic reforms in agriculture

The growth of gross agricultural output as of the corresponding period of last year made up 107,2 %. As compared with last year production of wheat increased to (125,5 %), potato (107,4 %), vegetables (114,2 %), fruits and berries (135,2 %), melons and gourds (141,7 %), grapes (141, 3 %), milk (105,6 %), meat (106,6 %), eggs (106,6 %).

Within the framework of adopted measures on development of farming over 56 thousand farms were created on the basis of reorganized 445 agricultural cooperatives (shirkats). The total number of active farms was 181,7 thousand as of July 1, 2006. On the average one farm uses 26,1 hectares of land.

For the last period 219 specialized agricultural co-operatives (shirkats) producing fruit-and-vegetables and grapes were completely reorganized into farms. More than 39 thousand farms were set up on the basis of reorganized shirkats. 319,2 thousand hectares of land were given to these farms.

As a result of adopted measures on creating the conditions for the organization of activity of agro-firms 197 agro-firms were created on the territories of reorganized shirkats. The founders of these firms are farms, processing enterprises and other economic entities.

As a result of implementing the Program for livestock of cattle for the period of 2006-2010 livestock of cattle has increased by 4,0 % in comparison with January 1, 2006 and has made up 6775,3 thousands of heads.
The access of the population to cattle trade has been expanded through the introduction of auction sales. Thus, for the financial period 166 auction sale units were set up , where 12157 heads of pedigree cattle were sold.
As of July 1, 2006 microcredits for a total amount of 11,2 billion sums were allocated to peasantries for purchasing of cattle.

V. Development of the social sphere

Employment of the population. During implementation of regional programs for employment, support and development of businesses and competition, 312,8 thousand new workplaces were created. Active policy on a labour market promoted growth of employment for 2,8 %.

Implementation of development measures of various forms home-work, including cooperation with the large-scale industrial enterprises made it possible to create 78,3 thousand jobs (118,6 %) in the sphere of home-work.

Income of the population. In the first six months of this year, real available cash incomes grew almost by 17 % per capita.

As a result of implementation of the advanced payment system and financial stimulation of the activity of pedagogical and medical staff, teachers’ tariff rate in comparison with the last year has increased on the average for 1,3 times, medical workers for 1,4 times. On these purposes 33,7 billion of sums were allocated from the state budget. Besides, for the past period 275,4 thousands families in need with children, 48,7s thousand poor families received social support from the state and 71,8 thousands woman were entitled to allowances for nursing the child under 2 years of age.

Under the State program «The Year of charity and medical workers», the large-scale enterprises, firms and organizations with steady financial capabilities have taken guardianship of all orphanages, houses for the elderly and handicapped people. 21,9 thousand poor families nationwide were provided with cows free of charge.

Construction of objects in the social sphere. During the first six months the Fund of School Education mastered 120,3 billion UZS. New construction and capital reconstruction of schools for 37,2 thousand pupils were carried out. There has been repair of schools with the total number of 155,5 pupils.

For the first half-year the Fund for Development of Children Sports mastered 16,7 billion UZS. There are 33 sites, including 17 reconstructed sites and 16 extensions of school sports halls started to operate. In the first half-year of the current year 11 kinds of sports stock were produced by local manufacturers.

Positive results in the social and economic development achieved in first six months of 2006, demonstrate rightness and efficiency of the policy pursued by the President of Uzbekistan Islam Karimov on the further liberalization of economy and acceleration of the structural reforms that provide macroeconomic stability and sustainable high rates of economic growth.

The Ministry of Economics
of the Republic of Uzbekistan

State Statistic Committee
of the Republic of Uzbekistan

Embassy of Uzbekistan
Perleberger Str. 62
10559 Berlin
Phone: 030 39 40 98 -0; - 13
Fax: 030 39 40 98 62
www.uzbekistan.de

www.openpr.de
www.uza.uz

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