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CERR: The business climate indicator showed a noticeable increase, updating the maximum for the period from March 2023



The composite indicator of the business environment in July was 65 points against 57 in June. The situation in the field of agriculture and services continued to improve, and company valuations reached the highest level since the beginning of the year. Current demand estimates remained in the positive zone, demonstrating stability. Business price expectations have decreased slightly.

 

The state of the business climate in Uzbekistan improved markedly in July, according to the results of the CERR survey.

In July, the consolidated business climate indicator increased by 8 points compared to the previous month to 65, compared to last year, the growth was 12 points, which assesses the state of the business climate in the country as positive.

Dynamics of the business climate indicator

 

The growth of the consolidated indicator was significantly influenced by the positive dynamics in the agriculture sector, where the growth was 15 points (from 55 to 70 p.) and the service sector — 7 points (from 60 to 67 p.). Slightly less noticeable growth was noted in industry (from 54 to 58 p.) and construction (from 61 to 64 p.).

All indicators of the current state of the business showed growth

Estimates of the current state of business in July immediately increased by 10 points and amounted to 52, which is explained by a noticeable improvement in agriculture (from 47 to 59 p.) and services (from 43 to 55 p.).

The share of negative assessments of "the current state of business has deteriorated" decreased by about 3% (from 12 to 9%), and the share of respondents who noted the positive state of their business as "good" remained unchanged at 46%.

From June to July, the share of enterprises that increased the number of their employees decreased by 5% and amounted to 19%. By 3% (from 45 to 42%) there were fewer enterprises that noted an increase in demand for their goods/services.

Business optimism regarding development prospects has improved

Estimates of business expectations regarding the prospects for development in the next 3 months increased by 5 points to 79, against last year's 69 points. The greatest optimism was noted in the agricultural sector by 18 points at once (from 63 to 81 points).

It was detected that the number of favorable assessments of companies expecting an improvement in the general state of business in the next 3 months practically did not change and remained at a fairly high level, exceeding 73%. Estimates of demand showed stability, 71% of Uzbek companies reported positive dynamics. And the number of enterprises that plan to increase the number of employees has become noticeably less by 12% (from 68 to 56%).

According to the survey, the share of entrepreneurs expecting an increase in prices for their goods/services in the next 3 months decreased by 2%.

In general, the relationship between the values of the current situation and expectations in July means that the positive trend in economic development will continue in the next 3 months.

Reduction of obstacles in doing business as a factor of improvement in indicators

If in May the number of entrepreneurs who faced barriers was 46%, then in June and July it was 42%.

So, the share of respondents who noted difficulties in accessing finance decreased by 5% (from 15 to 10%) and by 4% there were fewer negative assessments regarding high tax rates and tax administration to 9%, respectively.

The Center for Economic Research and Reforms (CERR) publishes monthly a series of information and analytical materials based on the results of a survey of the business climate of the real sector and the service sector and monitoring of business activity in the regions. Short-term qualitative assessments of the state of the business are conducted on the basis of surveys. Since January 2023, the Business Climate Index of Uzbekistan is periodically being published on the international economic portal Trading Economics.