Macroeconomic impact of inbound tourism in Uzbekistan and its forecasting based on a dynamic panel model

Abstract

The article assesses the impact of inbound tourism on the national economy using Tourism Satellite Account indicators and develops a probabilistic forecast up to 2030. It argues that gross value added of tourism industries must be distinguished from tourism direct gross value added: in 2024 their ratio was 3.8. A formula for the effect of extending the length of stay is proposed; extending the stay by one night raises inbound tourism consumption by UZS 3.19 trillion (9.4%). Because the annual national series is short and has structural breaks, a dynamic panel gravity model based on 2,134 observations for 194 countries is used. Out of sample, the model with an error of 1.0% outperformed ARIMA (33.6%) and a random walk with drift (5.4%). The number of inbound tourists is forecast to reach 18.9 million in 2030, and the probability of achieving the target of 20 million tourists is 47.6%.