(MENAFN- Trend News Agency) TASHKENT, Uzbekistan, June 28. To reach upper-middle-income status by 2030, Uzbekistan must accelerate its economic growth to near double-digit rates, with a strong emphasis on boosting total factor productivity (TFP), Trend reports citing the World Bank.

Achieving this ambitious target will require removing regulatory obstacles, tackling market distortions and technological bottlenecks, deepening trade integration, and investing heavily in human capital development.

Between 2010 and 2022, Uzbekistan's economy grew at an average annual per capita rate of 4.2 percent, outpacing regional peers in Europe and Central Asia as well as other lower-middle-income countries. However, this growth has largely depended on capital investment and only recently began to generate stronger employment growth, accelerating notably in 2023 and 2024.

A key challenge remains the expansion and strengthening of the private sector to enhance market competitiveness. In 2020, over 2,000 state-owned enterprises (SOEs) accounted for 32 percent of GDP, with many operating in sectors where private firms could outperform them. Accelerating the privatization of these SOEs and improving corporate governance are critical steps to unlocking the sector's full potential.

Modernizing infrastructure-especially in electricity and transportation-is another vital priority. The government is actively encouraging private investment in the energy sector and implementing tariff reforms designed to achieve full cost recovery by 2026–27. Upgrading infrastructure in high-productivity regions like Tashkent and Qarshi, alongside improving road and rail connections between key economic centers, will reduce business costs and enhance competitiveness.

Trade integration has progressed markedly, evidenced by the trade-to-GDP ratio experiencing a substantial increase, more than doubling since 2017 to attain a notable 71.6 percent in 2022. Nevertheless, a mere 6 percent of enterprises are presently engaged in the exportation of their offerings, underscoring a significant opportunity for expansion. Optimizing customs protocols, enhancing preferential trade frameworks, and advancing logistical infrastructure are critical to facilitating greater access to Uzbekistan's markets.

To bolster these strategic objectives, the World Bank advocates for the streamlining of licensing and permitting frameworks, the establishment of autonomous regulatory bodies for critical sectors, the enhancement of competition enforcement mechanisms, and the facilitation of financial access for small and medium-sized enterprises (SMEs).

Through the execution of these multifaceted reforms, Uzbekistan seeks to maintain robust economic expansion, cultivate high-quality employment prospects, and enhance its competitive edge in the international arena.

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