IMF Executive Board approved a $375 million disbursement to Uzbekistan to address the impact of COVID-19

The IMF Executive Board approved the disbursement of $375 million to support Uzbekistan’s response to the COVID-19 pandemic, informs “Dunyo” IA correspondent.

The fund comes under the Rapid Credit Facility and Rapid Financing Instrument. IMF says that the fund will help to meet Uzbekistan’s increased need for fiscal and urgent balance of payments financing arising from the impact of the COVID-19 crisis.

According to IMF’s estimation, Uzbekistan’s macroeconomic growth is projected to slow to 1,5 percent this year and lower revenues and additional crisis-related expenditures—on healthcare and to support households and firms—are expected to widen the fiscal deficit to about 4 percent of GDP.

Along with this, in the press-release, IMF calls authorities to increase the accountability and transparency of expenditures to improve the efficiency and safeguard the use of public resources.

Mr. Tao Zhang, IMF Deputy Managing Director and Chair in his statement noted that the COVID-19 pandemic has severely impacted Uzbekistan’s economy.

“Growth is projected to slow significantly while lower exports and remittances will widen the current account deficit,” said Zhang. “The fiscal deficit is expected to increase on the back of a fall in revenues and crisis-related expenditures. These have generated significant balance of payments and fiscal financing needs.”

Mr. Zhang suggested local authorities to continue developing their inflation targeting framework focused on price stability while allowing the exchange rate to move in line with fundamentals. In his opinion, they should also continue to provide appropriate liquidity support to the financial system, while continuing rigorous financial supervision and maintaining capital requirements and loan standards.

Jamshid Kuchkarov, Deputy Prime Minister-Minister of economic development and poverty reduction of the Republic of Uzbekistan in a follow-up tweet stated that the policy of the President of the Republic of Uzbekistan on openness, transparency and accountability allows the country to attract concessional external loans from international financial institutions to reduce the negative effects of the global crisis and the pandemic.

The policy of the President of the Republic of Uzbekistan on openness, transparency and accountability allows the country to attract concessional external loans from international financial institutions to reduce the negative effects of the global crisis and the pandemic.

— Jamshid Kuchkarov (@KuchkarovJA) May 18, 2020

Uzbek Ministry of Finance in a press-release statement reassured of transparency and accountability of public funds.

“Accounting Chamber of the Republic of Uzbekistan will conduct an independent audit. Its outcomes will be released within the 6 months after the end of fiscal year,” concludes the statement.

UzA