Tashkent, Uzbekistan (UzDaily.com) -- The business climate in Uzbekistan improved in March. The reason for the improvement was current estimates and optimistic sentiment in agriculture and industry. The main reason for this was the improved forecasts of entrepreneurs in these sectors about the current and future state of enterprises, as well as an increase in demand and the number of employees.

Business climate is an analytical indicator that is calculated monthly based on a survey conducted by the Center for Economic Research and Reform starting in 2020.

The participation of enterprises in surveys allows to assess the current economic situation before it is reflected in official statistics. In addition, enterprise expectations are leading indicators of economic activity.

The growth of the consolidated business climate was determined by the positive dynamics of both current estimates and expectations.

In March, the composite indicator of the business climate increased by 4 points to 60 compared to February, which indicates a further expansion of business activity. Whereas in March last year the consolidated indicator was 64 points.

The improvement in the business climate was significantly influenced by positive dynamics in agriculture and the industrial sector.

In agriculture, the business climate indicator soared 20 points over the month. Among the main reasons are an improvement in positive business assessments relative to the current state of enterprises by 4 percentage points (pp), an increase in demand by 6 pp, an increase in the number of employees by 14 pp. In addition, the sector's expectations about the future state of their enterprises increased by 4 percentage points.

Dynamics of the business climate indicator

In March, the business climate in industry increased by 2 points. The main reason for this was the improved forecasts of entrepreneurs about the current and future state of their enterprises. According to the survey results, 36% of companies called the current state of the industry good, which is 7 percentage points higher than last month. Managers of this sector also predict an increase in demand by 5 percentage points.

At the same time, the March survey results reflected a decrease in assessments of enterprises in the construction sector by 4 points and the services sector by 3 points, respectively.

Thus, in construction, assessments of the current state in March decreased by 10 points, and expectations regarding improved demand decreased by another 4 percentage points.

In the service sector, the level of expectations regarding business growth in the future remained unchanged at a fairly high level – about 80% of companies.

At the same time, expectations regarding an increase in the number of employees decreased by 3 percentage points.

Current business valuations have improved in most economic activities.

Estimates of the current state of business, relative to last month, increased by 6 points to 44. In turn, this is due to fluctuations in indicators of the current state in industry, construction and agriculture. If the main contribution to improving the current state of business in March came from agriculture, where the increase was 25 points, then in the services sector there was a decrease of 3 points.

Expectations for business development prospects indicate a fairly high level of optimism among entrepreneurs.

The composite indicator of expectations regarding business development prospects in the next 3 months reached 77 points, mainly due to an improvement in optimism in agriculture and industry by 15 and 1 point, respectively.

In March, the relationship between the current state and expectations showed a positive trend in economic development, which will continue in the next three months.

About half of the surveyed entrepreneurs noted the presence of barriers to doing business.

Entrepreneurs in industry have become increasingly concerned about problems related to financing, high interest rates and electricity supply. On the contrary, there has been a decrease in problems associated with gas supply to industry and low demand.

The main problems for business in agriculture are related to water supply and electricity supply.

The success rate in the fight against corruption in the construction industry is relatively high.

At the same time, problems associated with high tax rates and financing in the service sector have increased.

In general, the problems that entrepreneurs consider most pressing include financing, high interest rates and tax administration.