Uzbekistan - Third Agriculture Public Expenditure Review

Overview & Synopsis

Agriculture is a cornerstone of Uzbekistan’s economy, accounting for 24.3 percent of GDP, 23.9 percent of employment, and 20.4 percent of exports in 2023.2 It plays a vital role in reducing rural poverty, ensuring food security, and mitigating climate change risks. Despite its importance, the sector holds significant untapped potential, as shown in comparative analyses both internationally and domestically. Uzbekistan’s agricultural sector faces pressing challenges, particularly from climate change and the depletion of natural resources. As part of a broader set of policy reforms for agriculture, the Government of Uzbekistan (GoU) is reassessing how it supports agriculture to better stimulate growth, productivity, and climate resilience. This Third Uzbekistan Public Agriculture Expenditure Review, intended to inform the agriculture policy reform process, finds that public agricultural expenditures have increased significantly over the last three years, especially for variable input use, as general sector investments declined. This report finds that public agricultural expenditures have risen notably, particularly in input subsidies. Spending grew from UZS 24.9 trillion in 2020 to UZS 27.2 trillion in 2023, representing 2.8 percent of GDP or about US 2.2 billion dollars on average over this period. At 2.6 percent of the 2023 GDP, Uzbekistan’s agricultural spending is among the highest globally, exceeding that of peers such as China, Kazakhstan, and Viet Nam. While this reflects the government’s commitment to the sector, it also raises concerns about fiscal sustainability, opportunity costs, and potential inefficiencies in resource allocation.