The recovery of key sectors and the revival of consumption can become drivers of economic growth in the medium term. At the same time, special attention should be paid to stimulating business activity in the construction and services sectors, where there is still a more restrained dynamics.
The business climate is a monthly analytical indicator calculated by the Center for Economic Research and Reforms (CERR) based on surveys of enterprises since 2020.
Companies' participation in surveys allows them to assess the economic situation ahead of official statistics, and their expectations represent leading indicators of activity. The growth of the consolidated business climate is determined by the positive dynamics of current estimates and expectations.
According to the results of the June survey, an improvement in the business climate was noted in Uzbekistan. The consolidated business climate indicator increased by 5 points compared to last month and amounted to 53 points.
The share of respondents who rate the current economic situation as "good" increased by 3 percentage points (pp) compared to the previous month, reaching 40%. This indicates an increase in the confidence of entrepreneurs in the favorable business environment.
38% of respondents noted an increase in demand for their products/services over the past 3 months, which is 4 pp higher than in May. This dynamics indicates a gradual recovery of consumer activity in the economy.
At the same time, 25% of respondents expect prices to rise in the next 3 months, which corresponds to the level of the previous month. At the same time, the share of entrepreneurs predicting price reductions increased by 1 pp, reaching 10%.
There is an improvement in business sentiment: more companies assess the current situation as favorable, there is an increase in demand, although inflation expectations remain. These indicators indicate a gradual recovery in business activity in the country.
According to the results of the CERR online survey, the share of respondents who noted price increases decreased by 4 pp compared to the previous month, and the share of those expecting price increases in the future decreased by 3 pp. Average household incomes increased by 5%.
At the same time, according to the Central Bank of Uzbekistan, the volume of money transfers from abroad in April-June this year increased by more than 36% compared to the same period last year.
So, the observed positive trends in the business environment, the consumer sector and money transfers create prerequisites for further recovery of economic activity in the republic.
In addition to the overall improvement in business activity, there is a positive trend in certain sectors of the economy.
The indicator of the business climate in industry increased from 37 to 55 points, in agriculture - from 52 to 55 points.
At the same time, the indicators of the business environment in the construction and services sectors remained virtually unchanged and amounted to 37 and 52 points, respectively, which indicates an uneven recovery in the sectors of the economy.
In agriculture, the share of companies that noted employment growth in 3 months increased from 28% to 31%, while the share of those expecting stable demand remained virtually unchanged - 29% versus 28%.
There is a more noticeable improvement in the industry: the share of those who assess the situation as "good" increased from 29% to 38%, and those who recorded an increase in demand - from 31% to 35%. In addition, the share of those expecting price cuts increased from 7% to 9%.
In construction, the picture is more stable: the share of those who assess the current state as "good" has practically not changed - 36% versus 37% in May. At the same time, the share of business conditions awaiting improvement has increased significantly - from 69% to 73%.
Similar trends are observed in the service sector: the share of entrepreneurs who assess the current situation as "good" increased from 39% to 42%, and those who expect business growth in the future - from 73% to 74%. At the same time, demand for services increased from 39% in May to 41% in June.
According to the results of the CERR analysis, business in Uzbekistan still faces difficulties related to access to finance and tax administration.
The share of entrepreneurs who identified financing as one of the main problems decreased from 16% in May to 15% in June. Nevertheless, this issue is acute in the agricultural sector, where the share of entrepreneurs facing financing problems increased from 17% to 25% during the analyzed period.
There was a slight decrease in the share of entrepreneurs who faced financing problems and a slight increase in other areas.
Infrastructure-related issues such as electricity and gas supply are becoming increasingly relevant for entrepreneurs, especially in the industrial sector.
The sector for the study of the banking and financial sector
tel: (78)150 02 02 (441)
Public Relations and Media Sector
tel: (78)150 02 02 (417)
leave a comment