Tashkent, Uzbekistan (UzDaily.com) —  All sectors of the economy, including agriculture, industry, construction, and services, have shown improvements in the business climate. However, entrepreneurs still face a number of challenges. The most pressing issues remain funding, tax rates, and energy supply.

Entrepreneurs’ forecasts for the future remain optimistic, with growing expectations in agriculture and construction, while optimism in industry has decreased.

The business climate index is a monthly analytical indicator developed by the Center for Economic Research and Reforms (CERR), based on surveys of enterprises. In August 2024, more than a thousand entrepreneurs participated in the survey, providing a high level of sample representativeness and allowing for well-founded conclusions about the current state of the economy.

Composite Business Climate

According to the August survey, the business climate has improved. The composite business climate indicator increased by 6 points from the previous month, reaching 53 points.

Dynamics of the Business Climate Indicator in Uzbekistan

The proportion of respondents rating the current economic situation as “good” increased by 4 percentage points (p.p.) compared to the previous month, reaching 41%.

39% of entrepreneurs noted that demand for their products/services has grown over the past three months, which is 4 p.p. higher than in July.

At the same time, 29% expect price increases in the next 3 months, which is 9% higher than the previous month. Meanwhile, the proportion of entrepreneurs forecasting price decreases remained unchanged at 8%.

In August, improvements were observed in the composite business climate indicator across all sectors of the economy.

In particular, in agriculture, the business climate rose by 10 points to 56 points; in industry, it increased by 7 points to 50; in construction, activity grew by 11 points to 56, while in the services sector, the smallest increase was recorded, with a rise of 1 point to 52.

Current State of Business

The current state of the business climate indicator increased by 9 points from the previous month, reaching 39. In agriculture, there was a rise of 12 points to 47; in industry, an increase of 18 points to 38; and in construction, an increase of 17 points to 45. In the services sector, the current state of business improved only by 2 points to 36.

The noticeable improvements in agriculture, industry, and construction indicate growth in production activity and demand.

Business Expectations

The business climate expectations indicator increased by 1 point, reaching 67 points. In agriculture, the index rose by 8 points to 67; in construction, it increased by 5 points to 67; in industry, expectations for future developments in the next 3 months fell by 6 points to 63; while in the services sector, entrepreneurs’ optimism remained unchanged at a relatively high level of 69 points.

The improvement in sentiment in agriculture and construction reflects positive attitudes and confidence among entrepreneurs in these sectors. However, the decline in industry may indicate emerging problems or uncertainties.

Current Business Problems

The survey identified the most pressing issues faced by entrepreneurs. Notably, there has been a decrease in problems related to funding by 3% and high tax rates by 2%.

Concerns about tax administration remain stable at 5%.

Additionally, there has been a decrease in the proportion of entrepreneurs who consider funding the main obstacle, with this proportion decreasing from 17% in January to 10% in August.

Sectoral Analysis of Business Problems

In industry, there has been a decrease in issues related to funding and energy supply, although high tax rates are still a concern.

In agriculture, the proportion of entrepreneurs facing difficulties in obtaining land plots and licenses has increased, despite a reduction in other problems.

In construction, difficulties with energy supply and taxes have increased.

In the services sector, there has been a reduction in problems related to funding, land plots, low demand, and energy supply.