As the world grapples with sluggish economic recovery and escalating geopolitical conflicts, Uzbekistan emerges with remarkable achievements in 2024, driven by structural reforms at its coreThe country’s economy reported a GDP growth rate climbing to 6.5%, while total foreign trade surged by 3.8%, primarily fueled by the contributions of small and medium enterprises, which accounted for over half of the economic vitalityThis Central Asian landlocked nation is continually advancing structural reforms to reshape its economic landscape and embrace openness.

With a blend of speed and quality, Uzbekistan's economy has achieved dual breakthroughs in 2024, showcasing three core outcomes that signify effective transformation.

Firstly, there was a substantial increase in aggregate figures, highlighted by resilienceThe total GDP reached an impressive 14.54 trillion Soms (approximately 115 billion USD), achieving a growth rate not seen in five years, with per capita GDP breaching the 3000 USD mark and actual growth standing at 4.4%. The industrial output value rose by 6.8%, with manufacturing accounting for over 85% of total productionA localization initiative facilitated exports worth 1.14 billion USD, with metallurgy, textiles, and food sectors contributing significantly—62% of total outputForeign trade, contrary to global trends, increased to 66 billion USD, with exports of fruits and vegetables soaring by 31.2% and chemical exports climbing by 29.1%, while the trade deficit shrank by 13%.

Secondly, the optimization of the economic structure led to diversified progressThe service industry’s share in the economy increased to 47.4%, with information technology and tourism emerging as new growth poles, significantly unlocking the potential of the digital economyThe number of small and micro enterprises reached 358,000, contributing 54.3% to GDP and 84% of retail salesIn Tashkent, the density of enterprises reached 27.5 per thousand individuals, indicative of a vibrant entrepreneurial ecosystem outperforming the rest of Central Asia

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Regional balanced development accelerated, with Tashkent's economy growing at 10.4%, Navoi Province experiencing a 7.7% growth reliant on mining, and Surkhandarya Province’s agriculture constituting nearly 40% of its economic output, establishing a multipolar support structure.

Thirdly, the improvement in living standards led to increased incomeTotal resident income grew by 18.5%, translating to an actual increase of 8.1% after adjusting for inflation, with per capita income in Tashkent reaching 60.6 million Soms (approximately 4,793 USD). Businesses operated by individuals contributed more than 35% to income, with micro and small enterprises becoming pivotal in revenue generation, particularly in Jizzakh and Bukhara provincesTransfer payments accounted for 26%, and remittances grew by 12%, leading to an increase in the coverage of social subsidiesConsequently, the poverty percentage decreased from 17% to 11%.

This remarkable economic performance is attributed to Uzbekistan's sustained eight-year focus on reformFrom optimizing the tax system to transitioning energy sources, from breaking the mold of state-owned enterprises to enhancing regional cooperation, a comprehensive transformation is reshaping the economic fabric of the nation.

The ongoing structural reforms are consistently releasing institutional dividendsEasing the tax regime has spurred market dynamism; for example, the VAT rate dropped from 20% to 12%, and over 7,000 raw materials became exempt from duties, leading to an overall reduction in business costs by 15%. The push for a green transition has opened new opportunities, with 35 renewable energy projects signed in four years, totaling an installed capacity of 18.6 gigawattsNotably, Saudi Arabia's ACWA Power invested 13.1 billion USD for a 9.6 gigawatt solar projectConsequently, clean energy's share in the national energy mix rose to 18%.

Furthermore, progress in state-owned enterprise reform is evident as the privatization of IPOTEKA BANK, the country’s third-largest commercial bank, has been completed, leading to state-owned bank assets falling below 68% and a plan to push 75% of state enterprises to the market by around 2025.

Simultaneously, industrial upgrades and innovation-driven initiatives progressed hand in hand

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Emphasizing localization, Uzbekistan produced 110.2 trillion Soms worth of localized goods, drawing companies like BYD and Kia to establish manufacturing plants in the countryThe IT park’s export revenue reached 344 million USD, with high-tech products comprising 12% of the total exportsThe "Million Programmers" initiative successfully garnered over 500,000 participants, while female participation in STEM fields increased to 37%, and enrollment rates in higher education rose to 28%. Agricultural practices have also seen innovation, with the introduction of drip irrigation across 2,000 hectares, and the market reform of cotton has unleashed capacity, pushing fruit and vegetable exports beyond 1.5 billion USD.

Investment has become a critical engine driving sustained economic growthSince 2017, Uzbekistan has attracted a remarkable 188 billion USD in investmentsBy 2024 alone, more than 36 billion USD in foreign direct investment flowed into the country, with cumulative totals reaching 87 billion USD, of which manufacturing, energy, and infrastructure sectors accounted for over 70%. The investment-to-GDP ratio rose to over 30%, and 560 large and medium-sized projects became operational, with a total value of 70 trillion Soms, solidifying a foundation for sustainable growth and export expansion.

The dual engines of reforms and openness not only drove internal growth but also unlocked international cooperation opportunitiesIn 2024, practical cooperation between China and Uzbekistan transitioned from broad strokes to intricate collaboration, with three critical sectors demonstrating a profound commitment to a shared future and injecting new vitality into regional development.

Green cooperation has set a benchmarkThe first phase of a 1-gigawatt photovoltaic project, backed by China Energy Engineering Corporation, successfully connected 400 megawatts to the grid, generating 2.4 billion kilowatt-hours annually, which equates to a reduction of 2.4 million tons in carbon emissions each year

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Furthermore, the local procurement rate for this project reached 65%, creating 1,600 jobs and solidifying the sustainability of Sino-Uzbek energy cooperation, establishing a model for green Silk Road collaborationThe wind power project by Goldwind Technology in Uzbekistan’s Zarafshan officially commenced operations with an installed capacity of 521.7 megawatts, becoming Central Asia’s largest operational wind project, which can provide electricity for 500,000 households, reducing carbon emissions by 1.1 million tons annually.

Agricultural partnerships have also helped break through challengesXinjiang Tianye has implemented efficient water-saving systems in Uzbekistan, improving irrigation efficiency by 40% in trial areas and increasing wheat yields by 25%, alongside training a thousand technical personnelIn addressing soil salinization in Uzbekistan's Aral Sea region, the Chinese team developed multi-stage sedimentation devices and optimized irrigation systems, effectively improving the ecological environment and reducing the hazards of salt dust storms.

Infrastructure cooperation has accelerated connectivityIn June 2024, the China-Kyrgyzstan-Uzbekistan railway agreement was finalized, with groundbreaking ceremonies held on December 27 in Kyrgyzstan's Jalal-AbadUpon completion, the rail line is expected to handle 15 million tons of cargo annually, shortening transport times by seven days and significantly enhancing Uzbekistan's position as a regional logistics hub, whilst promoting export diversificationUzbek President Shavkat Mirziyoyev remarked that this railway connects Central Asia to China via the shortest route, aligning seamlessly with the objectives of the Belt and Road Initiative and aiding in the sustainable development and prosperity of the regionUzbekistan is keen to leverage all its available technical and human resources while actively involving itself at each stage of railway constructionNotably, the construction of a large-scale multimodal logistics center in the Syr Darya region, facilitated by Tai Tong International Transport Co., is set to improve the efficiency of cargo transport between China and Central Asia, thus reducing trade costs.

Analysts suggest that Uzbekistan's economic achievements in 2024 exemplify a typical path for latecomer economies to break through via structural reforms

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