PRESS-RELEASE

0f the Government and the Central Bank of the Republic of Uzbekistan

and the Mission of the International Monetary Fund

Tashkent 17 December 2004

The mission of the International Monetary Fund headed by Mr. John Wakeman-Linn , advisor in the Middle East and Central Asia Department visited the Republic Uzbekistan from 9 to 17 December 2004 .

During its stay the mission held discussions with the authorities on the issues of development of the Republic's economy in the current year, and analyzed economic projections for 2005 and for a middle term.

Both sides noted that the cooperation between the International Monetary Fund and the Government and the Central Bank of the Republic of Uzbekistan is based on a constructive dialogue and confidence. The mission expressed special gratitude for an excellent access provided to the data requested.

The mission noted with satisfaction that the program of macro-economic and structural reforms developed in close cooperation with the IMF and other international financial institutions and carried out by the Government made 2004 a turning point in the process of economic transformations.

The mission congratulates the Uzbek authorities on strong economic results achieved in 2004, in particular, on a more than 7 percent GDP growth, the external current account surplus in excess of $ 1 billion and a growth of gold and foreign exchange reserves exceeding 30 percent.

The mission noted with satisfaction that Sum convertibility into foreign exchange continued to operate fairly successfully and that it facilitated the achievement of strong economic results. This also encouraged a dynamic growth of exports including through an increase in export of high value added goods.

The mission noted an acceleration in the pace of economic reforms carried out by the Uzbek Government, in particular, an increased pace of privatization, the transformation of loss making and inefficient shirkats into private farms, the beginning of introduction of a fully funded pension system and administrative reforms aimed at reducing the Government's presence in the management of the economy.

The mission congratulates the Government on excellent results achieved in the 2004 budget execution and welcomes, in particular, the decision to stop relying on budget financing by CBU and to pursue this policy in 2005.

The mission supports the macroeconomic program of the Government of the Republic of Uzbekistan and structural reforms to be implemented in 2005. To achieve the goals set, the mission noted the importance of the Government's determination to further ensure macroeconomic stability, to launch a new stage of reforms in the banking sector, in housing and utilities area, to enhance tax legislation, to establish a Treasury system for the budget execution, and to develop a legislative framework for external trade activities in line with the WTO standards.

The mission welcomed the commitment of the Central Bank to ensure that no cash shortages occur in future and to meet all banks' requests for cash. The Government and CBU emphasized that the process of encouraging the use of plastic cards would be strictly voluntary for all parties.

The Government and the Central Bank of the Republic of Uzbekistan expressed gratitude to the IMF mission for a constructive and open dialogue and noted that the mission's recommendations would be attentively considered and taken into account for the elaboration and pursuance of economic policy for 2005 and for a middle term.