Trends and challenges of the business climate in Uzbekistan: CERR analysis

Consolidated business climate

According to the results of the September survey, the consolidated business climate indicator increased by 2 points compared to last month and amounted to 55 points, respectively.

The share of respondents assessing the current economic situation in the country as "good" increased by 4 percentage points (pp) compared to the previous month and amounted to 45%.

As for demand, 41% of enterprises reported an increase in demand for their products/services over the past three months, compared to 39% in August.

A quarter of the companies surveyed expect prices to rise over the next three months. At the same time, the share of entrepreneurs predicting lower prices was 9%.

In September, a noticeable improvement in the consolidated business climate indicator was noted in agriculture and industry. At the same time, there is a decrease in economic activity in the construction sector and services.

In particular, in the agricultural sector, the business climate index increased by 7 points, rising from 56 to 63; in industry, an increase of 16 points to 66 points was noted.

On the contrary, the construction industry recorded a more noticeable decrease in business activity - immediately by 14 points to 42, while in the service sector there was a moderate decrease by 5 points to 46.

Assessment of the current state of the business

The indicator of the current state of the business climate increased by 9 points compared to last month and amounted to 48.

The increase in current business activity is explained by an increase in current indicators in all sectors, including agriculture by 6 points, industry by 18 points, the service sector by 16 points and construction by 1 point, respectively.

A particularly noticeable improvement in industry and services indicates an increase in production activity and demand.

Estimates of business expectations

The optimism of companies decreased slightly in September. The indicator of business climate expectations decreased by 4 points and amounted to 63. While there is an increase in optimism in agriculture and industry — from 67 to 73 and from 63 to 76, respectively, in construction and services, there is a decrease: from 67 points to 38 and from 69 to 53. This may indicate possible challenges faced by these sectors.

Current business problems

In the course of the study, the most pressing problems that entrepreneurs most often face were highlighted. An analysis of current problems in September shows that financing remains the most pressing issue, increasing from 10% in August to 12% in September.

At the same time, there remains a stable level of concern about tax administration at the level of 5% and high tax rates at the level of 7%, respectively.

A decrease in the percentage of problems with electricity supply from 5% to 4% may indicate a partial improvement in the situation in this area, but the problem still remains relevant.

Industry analysis of business problems

In the industrial sector, the issues of financing and tax administration are of the greatest concern. There was also a decrease in problems with obtaining licenses and permits.

In agriculture, a decrease in the proportion of entrepreneurs facing problems with water supply and obtaining licenses may signal positive changes in the infrastructure and regulatory environment.

In the service sector, there has been a decrease in problems with high taxes and electricity supply.

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