AKIPRESS.COM - External trade is supporting growth; but import and export data show early signs of an overheating economy, IMF mission said in the statement following discussions with the Uzbek authorities in Tashkent during October 30-November 8, 2018.

Import growth remained very strong through the third quarter, reflecting buoyant domestic demand growth, especially for machinery and equipment. At the same time, non-commodity exports have slowed significantly through the third quarter, likely reflecting domestic demand pressures that are partly satisfied by rerouting exports to domestic uses.

The external position or current account will shift from a surplus in 2017 into a deficit of 3 percent of GDP in 2018 and remain in moderate deficit over the coming years.

Contrary to a widely held view in Uzbekistan, moderate external deficits are beneficial — and are to be expected — when an economy starts to reform and modernize. At the same time, it is important to correct early on macroeconomic policies that create excessive domestic demand pressures, which could eventually result in large and persistent external imbalances, IMF said.