The business climate of Uzbekistan in 2021 took a vector to recovery - CERR study

The business climate of Uzbekistan in 2021 took a vector to recovery - CERR study

The relaxation of quarantine restrictions and the large-scale measures taken by the Government to support the economy, including a number of measures by the President of the Republic of Uzbekistan which were taken after his meeting with entrepreneurs in the format of an open dialogue on August 20, 2021, allowed to maintain the positive economic growth rates in 2021.

The Center for Economic Research and Reforms (CERR) has been conducting a series of monthly surveys among more than 1,000 companies in two areas: qualitative assessment of the current state of business and the expectations of entrepreneurs regarding the prospects for the development of their business for the next three months.

In 2021, all indicators of business climate remained high. The average annual consolidated indicator in 2021 was 60 points, an increase of 18 points compared to 2020.

Changes in business climate indicators in 2021

The maximum value of the consolidated indicator of the business climate was recorded in January and accounted for 69 points, and the minimum - in May (53 points).

Dynamics of the business climate indicator

In May 2021, representatives of the industrial sector were concerned about the fall in demand for goods (55%), the provision of raw materials (13%). Representatives of the agricultural sector linked the poor condition with the difficulties of water supply.

In the period from June 2020 to April 2021, according to FAO data, a decrease in precipitation was observed in all regions of the country. Further, a sharp drop in temperature to -12 degrees at the end of February 2021 (in Karakalpakstan to -22 degrees) led to a deterioration in demand among the population, a temporary halt in construction work, as well as a slowdown in the agricultural sector (a possible loss of fruit and berry crops was estimated from 30% up to 80%).

Every month, on average for 2021, according to 43% of entrepreneurs, there was a good current state of the business climate, 46% improved demand for goods and services, and 26% increased the number of employees.

It is worth noting that 2021 was marked as very optimistic year for small and medium-sized businesses. On average, 77 % of respondents improved their general condition of their businesses in the short term.

Business climate change in December 2021

In December of 2021, the consolidated indicator of the business-climate, increased by 10 points compared to the same period in 2020 and accounted for 62 points, which assesses the state of the business climate in the country as positive (in December 2020 - 52 points).

The indicator of the current state of the business was 50 points (November - 44 points), which characterizes the positive sentiment of entrepreneurs regarding the current state of the business (in December 2020 - 33 points).

The growth of the current state indicator is associated with improved sentiment among entrepreneurs in industry - 47 points (November - 38 points), services - 51 points (November - 45 points), agriculture - 52 points (November - 47 points) and construction - 51 points (November - 49 points),

The indicator of expectations of business development prospects in October increased by one point compared to September and amounted to 71 points, which reflects the expectations of entrepreneurs about the prospects for the development of their businesses for the next 3 months as optimistic.

All of the above leads to an acceleration in the pace of recovery. Also, we see that 82% of companies expect that their businesses will have improving trends at the beginning of 2022 (November - 74%, December 2020 - 73%).

It is expected that the demand for goods and services will improve in 67% of enterprises (November - 65%, December 2020 - 60%), the number of employees will increase in 68% (November - 61%, December 2020 - 59%).

Feruzbek Davletov, Head of the Sector, the CERR

Public Relations Service CERR

Tel.: (+998) 78 150-02-02 (416)

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