The business climate in Uzbekistan

Compared to last month, the business climate indicator has slightly decreased, largely due to the unfavorable epidemiological situation and extended quarantine restrictions.


In July of this year, the Center for Economic Research and Reforms (CERR) interviewed over 1000 enterprises throughout the republic to determine how they assess their business development prospects.

The monthly survey is conducted in two areas: a qualitative assessment of the business's current state and the entrepreneurs' expectations regarding the prospects for the development of their business for the next three months.

In July, the consolidated indicator of the business climate decreased by 3 points compared to the previous month. It amounted to 55 points (on a scale from -100 to +100), which assesses the state of the business climate as positive.

In the sectoral context, the indicator of the business climate in the field of agriculture increased by 3 points and amounted to 65 points, services showed a decrease by 6 points, dropping to 53 points, in construction increased by 6 points (69 points in July) and in the industry recorded a moderate decrease of 7 points (44 points in July).


Dynamics of the business climate indicator

The decrease in business climate indicators is explained by the unfavorable epidemiological situation in the republic. In particular, 17% of small and medium-sized businesses noted the negative impact of the pandemic on demand for goods/services.

In particular, the indicator of the current state of business amounted to 38 points (a decrease of 7 points), which characterizes the positive sentiments of entrepreneurs regarding the current state of business.

The share of respondents who rated the current state of their business as good was 41%. When asked how the business situation has changed over the past 3 months, 39% of entrepreneurs reported improvement.

The demand for goods/services improved in 47% of enterprises, while employees increased by 25%.

The decline in the current state of the business indicator is associated among entrepreneurs in the industry, agriculture, and services, which is largely due to the extended quarantine restrictions.

At the same time, there is a significant improvement in the current state of the construction sector.

The other indicator, the business development prospects expectation index, decreased by one point to 72 points, reflecting entrepreneurs' optimism about their business development prospects for the next 3 months.

76% of entrepreneurs believe that their business prospects will improve. 67% of enterprises expect an improvement in demand for goods and services. 62% of respondents said the number of employees could increase in the next three months.

The industry expectation indicator showed the following changes: agriculture - 83 points (increase by 9 points), industry - by 73 points (increase by 11 points), construction - by 73 points (decrease by 9 points), services - by 64 points (decrease by 12 points).

In general, the correlation between the current situation and expectations for the future means that, according to business entities, the trend of positive economic growth will continue in the next 3 months.

The survey results show that despite the negative natural phenomena, the current year is characterized by a stable nature of economic recovery, which depends on the effectiveness of reforms over the past four years, providing a favorable business environment for business and economic stability.

Source: Review.UZ