MACROECONOMIC DETERMINANTS OF ECONOMIC DEVELOPMENT IN UZBEKISTAN: AN ECONOMETRIC ANALYSIS

Abstract

This study investigates the impact of key macroeconomic indicators on economic development in Uzbekistan over the period 1991–2024, using annual time-series data obtained from the World Bank, the International Monetary Fund (IMF), and the Statistics Agency of Uzbekistan. The macroeconomic variables examined include foreign direct investment (FDI) as a percentage of GDP, inflation rate, trade openness, financial sector development (M2/GDP ratio), and remittances as a percentage of GDP. Employing Ordinary Least Squares (OLS) regression within an IMRAD methodological framework, the empirical findings reveal that FDI and trade openness are the most statistically significant positive determinants of GDP growth, while inflation exerts a statistically significant negative influence. Financial development and remittances also contribute positively but with relatively modest effect sizes. The regression model explains approximately 87.4% of the variance in GDP growth (R² = 0.874). Diagnostic tests confirm the absence of heteroskedasticity, serial correlation, and multicollinearity, validating the reliability and robustness of the estimated model. These findings have important policy implications for Uzbekistan's ongoing economic reform agenda, suggesting that sustained improvements in the investment climate, trade liberalization, and inflation management are critical drivers of long-term economic development in transition economies.