The Tashkent International Investment Forum held a round table discussion on "Recession: Myth or Reality".

Experts noted that a recession could become a reality if economic growth declines, unemployment increases and investment falls, which could lead to an overall downturn in the economy. On the other hand, they believe that the right public policies and appropriate management of the economy can prevent a recession from occurring and ensure sustainable growth.

The round table was moderated by Timothy Eun, managing director of Trace Capital Holdings. He highlighted that Uzbekistan is experiencing reforms, digitalization, and automation, and the bank's position is strengthening. At the same time, the theme of recession is particularly relevant as the global economy is experiencing a significant increase in interest rates, a sharp rise in inflation, and price volatility in commodity markets. Many countries faced unexpected costs during the Covid-19 pandemic, economies are affected by declining food supplies amid localized conflicts, disrupted global supply chains, and continued de-globalization, among many other factors.

The Central Asian countries may have their own scenario for development. This is what the experts talked about at the roundtable.  

- As of this year, we can say that there are more risks," said Marco Mantovanelli, World Bank Country Manager for Uzbekistan. - The global community has faced a number of serious problems. In particular, the U.S. saw a rise in inflation due to the late tightening of monetary policy. In addition, China has been affected by the pandemic and quarantine, while Europe has failed to switch to recycled energy.

The expert noted that economists' forecasts are based on the world situation. Their assessments are influenced by indicators of inflation, stability, or conversely, destabilization. He is sure that the financial sector will be stressed in the long term. The outlook for the real economy could worsen. In addition, government debt also plays a role. An unstable world situation could affect global prices. Core inflation, which excludes food commodities and the energy sector, will remain stable, analysts say.

- Productivity and the attraction of investment, including for climate change, liberalization of supplies, and employment of the population, especially women, which we heard about in the speech of the President of Uzbekistan, may change the situation in the economy of the country," the expert believes.

The expert noted that the Central Asian market is waiting for a flattening of the growth curve with regard to inflation, and commodity prices may rise.

- The risks are related to the international environment," said Marco Mantovanelli. - Uzbekistan is a young country, it is the new personnel, which in the long term should be employed. The economy must create new jobs, and they can be organized at the expense of the private sector.

Nurbek Rayev, CEO of iKapitalist, said the world situation, particularly military conflicts in some countries, has also affected Kazakhstan's trade and economic relations. These tests and challenges are also familiar to Uzbekistan. Kazakhstan and Uzbekistan have the potential to develop cooperation, including in terms of increasing investment. The two countries have natural resources, human capital - something that can help with the recession.

- Uzbekistan is recovering all indicators based on many factors. Different kinds of changes are taking place," Enrico Pinali, head of the Asian Development Bank's Resident Mission in Uzbekistan, said. - Exports of commodities are picking up. But there is still concern about prices, because of unstable situation in the world market. International reserves allow countries to secure stability, including by maintaining a stable exchange rate, as well as revenues from various areas of the economy. We are seeing private sector activity picking up. A lot of investors are coming in from the Middle East. The country is becoming more open. Economic resilience is growing. There is the possibility of shocks and shocks and rising prices, but the public sector is holding back inflationary influences on the economy. In addition, the WB and ADB have been supporting budget financing in targeted ways over the past years.

Enrico Pinali, spoke about the demographic situation in the country, stressing that there are many opportunities for development. He noted that investments need to be more targeted, giving priority to education. It is also important to introduce modern technologies into educational institutions and provide basic training in engineering from the very beginning. According to Pinali, Uzbekistan needs to invest more in the education of the younger generation.

Enrico Pinali predicts there is a risk of recession in Uzbekistan, but there are encouraging factors that could lead to economic growth. Much will depend on responding immediately to emerging problems and investing in technology and education, he said. "Every risk is an opportunity. They are what move us toward change. Even crises lead to further improvement," the expert said of Uzbekistan's economic prospects. The country has potential for domestic capital markets, he said.

Abdulla Abdukadirov, first deputy director general of the Agency for Strategic Reforms under the President of Uzbekistan, agreed with the experts and noted that the country is taking measures to support the economy.

- The total inflow of foreign investment capital has reached $10 billion, as the President noted in his speech. Yes, export routes are limited, but if we look at major sea routes, the expenditure rates are about the same as in 2020. "So the situation is stabilising," Abdulla Abdukadyrov said. - "If you look at Uzbekistan's inflation figures, we have managed to keep it at 12% annually. The devaluation of the currency was not so drastic; we managed to keep the sum stable. There was an increase in foreign debt  but it has stopped and is gradually going down , as the main debt repayment has started.

The specialist said the Uzbek government has pursued a prudent fiscal policy. The refinancing rate is higher than the inflation rate.

- "As the President said, we are aimed at reducing state budget spending. We are opening serious opportunities for small business development. Privatization, digitalization and technological renewal are among the priorities we're planning to focus on and which could help us overcome the recession," Abdulla Abdukadyrov said.

In addition, he emphasized that in his speech at the opening of TIIF-2023 Shavkat Mirziyoyev said that state-owned stakes in 1,000 companies and another 1,000 state-owned objects, 40 companies of strategic importance for our economy will be put up for sale via IPO in Uzbekistan. This will create new conditions for the development of the economic sector.