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While Uzbekistan is one of the fastest-growing economies in the region with historical growth rates around 6-7% and expected GDP growth more than 5% in the mid-term, foreign trade of Uzbekistan has been growing at much faster pace, especially in the last 2 years.

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While YOY foreign trade turnover in 2017 increased by less than 10%, it increased to 27% in 2018, expected growth to more than 35% in 2019 and reach more than 47 bln USD. It is also important to mention, that foreign trade turnover to GDP ratio, which shows openness of economy in terms of trade has also been growing substantially. The ratio outpaced global average (57%) in 2018 and may be almost the same as in Germany (87%) in 2019.

 

Exports of Goods and Services

Export of good and services reached 14bln USD in 2018 and expected to reach 17.5bln in 2019. The main driver of growth is exports of the goods, while level of exports of services is more or less stable. In terms of the structure exports of the goods accounts for around 80% of the total exports.

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Exports of Goods

Exports of goods was 11.2bln USD in 2018 and expected to reach 14.3bln USD in 2019 with annual growth rate of 27%, based on the trend for 1H 2019.

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The structure of exports of goods hasn’t significantly changed in the 1H 2019 compared 1H 2018 with metals (mainly Gold) and Oil & Gas (mainly Gas) products accounting for 60% of total exports. It shows weakness of Uzbekistan Economy structure with substantial dependence on the Metals and Energy market prices.

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Another trend is the decrease of share of cotton in exports from 7% in 2016 to 4% in 1H 2019. In 2010 the share of cotton was around 13%. It means that finished product-oriented policy in textile is effective and less cotton yarn as a raw material is being exported. Moreover, Uzbekistan is investing in growing other agricultural products such as fruits and vegetables instead of cotton. It resulted in the increase of the share exports of Food products from 7% in 2016 to 14% in 1H 2019.

 

Exports of Services

Export of services was 3bln USD in 2018 and expected to reach 3.3bln USD in 2019 with annual growth rate of 10%, based on the trend for 1H 2019.

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Exports of Transport services accounts for more than 50% of total exports, while trips accounts for more than 30%.

 

Trip services increased due to active measures of the government in the development of Tourism, e.g. citizens of more than 80 countries can travel to Uzbekistan visa-free. This source of export was 345mln USD in 2016 and reached 728mln USD within just 1H 2019. You can read on the Hospitality sector prospects in Uzbekistan in our another Research.

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Key Export destinations

Uzbekistan’s exports destination is highly concentrated with Top-5 destinations account for more than 75%, and Top-10 exports destinations account for almost 90% of total exports.

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Switzerland is number one exports partner of Uzbekistan due to almost all the gold is exported to the country. The level of exports to Switzerland has been fluctuating, but mostly it was ranging between 2.5 and 3.5bln USD. In 2015 exports to China outpaced exports to another big trade partner of Uzbekistan – Russia. From 2012 when exports to Russia was 4.5bln USD to 2015 the number decreased to 1.2bln USD. In the last three years exports to China has been growing at much higher rate, so in the mid-term, the country can become number one exports partner.

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Imports of Goods and Services

Imports of the Goods reached 19.5bln USD in 2018 and expected to reach 25.9bln USD in 2019. The main driver of growth is imports of goods, while level of imports of services is more or less stable. In terms of the structure imports of the goods accounts for more than 90% of the total imports.

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Imports of Goods

Imports of Goods was 17.3bln USD in 2018 and expected to reach 23.4bln USD in 2019 with annual growth rate of 35%, based on the trend for 1H 2019. In 2018 growth rate of imports of goods increased by almost 44%.

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The structure of imports of goods hasn’t significantly changed in the 1H 2019 compared 1H 2018 with growing share of Machinery and Equipment accounting for majority of imported goods. Historically imports of Machinery and Equipment was around 45%. While imports is growing substantially and results in increasing negative trade balance, as the main driver of it is Machinery and Equipment in the mid-term it can positively effect GDP by increasing industrial production and raising exports of high value-added products.

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Another significant part of imported products are Chemicals and Food accounting for around 30% in total.

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Imports of Services

Import of services was 2.2bln USD in 2018 and expected to be almost the same amount in 2019.

Imports of Trip services account for more than 65% of total imports, while travel services account for more than 15%.

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Key import countries to Uzbekistan

Imports to Uzbekistan is less concentrated than Exports, but there is still high concentration with Top-5 importers accounting for more than 65%, and Top-10 imports destinations accounting for around 75% of total imports.

 

In imports to Uzbekistan again China and Russia are in the Top. We expect that imports from China will reach 5bln USD, as China is the main supplier of Machinery and Equipment to Uzbekistan. Within 1H 2019 goods and services from China were imported for the amount of 2.3bln USD (out of which Machinery and Equipment – 1.5bln USD), while from Russia for the same period it was imported for the amount of 1.7 bln USD (out of which Machinery and Equipment – 0.4bln USD).

One more important trend is growing imports from Korea - also mainly Machinery and Equipment which accounts for 75% of total imports of 1.2bln USD for 1H 2019.