The Executive Board of the International Monetary Fund (IMF) today approved the disbursement of SDR 275.6 million (50 percent of quota, about US$375 million) under the Rapid Credit Facility (RCF) and the Rapid Financing Instrument (RFI). This 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.
The crisis has adversely affected Uzbekistan’s macroeconomic outlook. Growth is projected to slow to 1½ 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. IMF and other donor support will help cover the resulting financing needs, support the economy, and provide assistance to affected households and firms. The authorities will increase the accountability and transparency of expenditures to improve the efficiency and safeguard the use of public resources.
“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. 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.
IMF financial assistance under the RCF and the RFI, along with support from other multilateral institutions, will help cover Uzbekistan’s fiscal and balance of payments needs and mitigate the impact on its foreign exchange reserves. It will also provide resources to support increased crisis spending for healthcare, social protection, and public support for affected firms and households”, Executive Board discussions, Mr. Tao Zhang, Deputy Managing Director and Chair declared.
