Uzbekistan – Opportunities for investors [ENG]

Summary

Denis Sokolov discusses Uzbekistan's economy and Tashkent's real estate market, highlighting the country's rapid development since its isolation ended in 2018. With a growing GDP, urbanization, and increasing consumer power, opportunities arise in retail, infrastructure, and real estate. Sokolov emphasizes the need for international business involvement to foster growth and address challenges like inequality and lack of global connectivity.

Takeaways

• 🌏 Uzbekistan is one of the largest countries in the former CIS and was isolated for about 20 years, which has affected its global visibility.
• 📈 Since 2018, Uzbekistan has been experiencing rapid development with a GDP growth of 17.1% in 2021, and forecasts of 4% for 2022 and 4.5% for 2023.
• 🏙️ The real estate market in Tashkent is underdeveloped and not fully counted in the GDP, indicating a potential for significant growth in this sector.
• 🏢 The Atashkan City project in Tashkent is a significant development with a business complex, office towers, hotels, and residential areas, showcasing the potential for urban development.
• 📉 Inflation in Uzbekistan is decreasing, from 13% in 2020 to an estimated 9% in the current year, with an outlook of 8% for the next year.
• 👥 Urbanization is a key trend, with Tashkent's population expected to reach almost 4 million by the 2030s, up from 3 million currently.
• 💹 The purchasing power in Tashkent is expected to grow at a rate of 12-15% per year, similar to Moscow's growth in the early 2000s.
• 🛍️ There is a high potential for growth in the FMCG and retail sectors as consumer markets are set to boom with the opening of new shopping malls.
• 🚧 Infrastructure is a significant area for improvement and investment, with needs in road infrastructure, power stations, and water supply.
• 🏫 Education is a growing concern with a high demand for quality schooling, presenting opportunities for international educational institutions.
• 🌐 Connectivity with the global economy is a challenge after years of isolation, but the government is proactive in seeking advice and opening up to international business.

Q & A

What was Dennis Sokolov's previous role at Cushman Wakefield?

Dennis Sokolov used to run the Central and Eastern European research team at Cushman Wakefield.

How has Uzbekistan's economy been performing since the regime change in 2018?

Since the regime change in 2018, Uzbekistan's economy has been developing rapidly with a GDP growth of about 17.1 percent in 2021, and forecasts of about 4 percent for 2022 and 4.5 percent for 2023.

What is the current per capita GDP of Uzbekistan?

The current per capita GDP of Uzbekistan is about two thousand dollars per person.

What is the significance of the Atashkan City project in Tashkent?

The Atashkan City project is a business complex and mixed-use development in the center of Tashkent, featuring a big park, a huge mall, office towers, hotels, and residential areas. It is significant as it represents a major development in a country with little experience in this sort of project.

What is the current inflation rate in Uzbekistan?

The inflation rate in Uzbekistan has been decreasing from 13 percent in 2020 to an estimated 9 percent for the current year, with an outlook of 8 percent for the next year.

What is the expected population growth rate of Tashkent?

The population growth rate of Tashkent is about several percent per year, with expectations for the city's population to reach almost 4 million by the 2030s.

What is the current state of urbanization in Uzbekistan?

Uzbekistan is experiencing a significant urbanization trend, with restrictions on internal mobility lifted, leading to an increase in people moving to Tashkent.

What are some of the challenges faced by Uzbekistan due to its rapid growth?

Some challenges faced by Uzbekistan due to rapid growth include uneven development across different areas of the country and increasing inequality.

Why is the middle class in Uzbekistan considered a problem for the economy?

The middle class in Uzbekistan is considered a problem because it is currently very small, which is a hindrance to the growth of a consumer economy that drives middle-class expansion.

What are some of the business opportunities that Dennis Sokolov identifies in Uzbekistan?

Some business opportunities identified in Uzbekistan include FMCG and retail, infrastructure improvements, real estate, and advising on urban planning to cope with rapid growth.

What is the current state of international business and investment in Uzbekistan?

International business and investment in Uzbekistan are in the early stages of emerging, with many international retailers operating through franchise partners.