S&P Global Ratings has revised its outlook on Uzbekistan to positive from stable, citing the country’s resilient economic performance, continued reform momentum, and favorable commodity price environment. The agency also affirmed Uzbekistan’s 'BB-/B' sovereign credit ratings.

Key Highlights

• Gold Prices and Fiscal Position: Elevated gold prices are expected to bolster fiscal revenues and support high foreign exchange reserves.
• GDP Growth Outlook: Real GDP is projected to expand by 5.6% annually over 2025–2028, underpinned by domestic demand, public investment, and remittances.
• Fiscal Consolidation: The government is forecast to narrow its fiscal deficit to 3.0% of GDP, down from 4.9% in 2023, through tariff reforms and subsidy reductions.
• Public Debt Trajectory: Net general government debt is expected to reach 34% of GDP by 2028, a moderate level relative to peers.

Reform Momentum and Investment Climate
Since launching wide-ranging reforms in 2017, Uzbekistan has pursued liberalization and infrastructure-led growth. The government has committed to phased energy tariff adjustments through 2027 to address rising gas imports and reduce subsidy burdens.
Investment-led expansion remains central to the country’s economic strategy. The Uzbekistan 2030 strategy prioritizes sectors such as energy, transport, agriculture, and digital communications. Public-private partnerships (PPPs) and foreign investments—such as Saudi-based ACWA Power’s $7.5 billion commitment—are expected to play a critical role.

External Accounts and Monetary Policy
The current account deficit, which narrowed to 5.0% of GDP in 2024, is forecast to average 5.7% through 2028, driven by high capital imports and a gradual decline in gold prices. Despite growing external leverage, Uzbekistan’s external reserves remain strong, with the Central Bank of Uzbekistan (CBU) maintaining coverage of approximately seven months of current account payments.
Monetary policy has become more effective since the liberalization of the exchange rate in 2017. Inflation is projected to decelerate gradually—from 10.1% in 2025 to 8.6% by 2028—aided by policy rate adjustments and tighter lending standards.

Ratings Outlook
The positive outlook reflects S&P’s expectation that Uzbekistan will:

• Sustain economic and governance reforms, including further energy pricing liberalization and strengthened oversight of government-related entities (GREs).
• Maintain fiscal consolidation while supporting growth.

An upgrade could be considered if the government demonstrates progress in moderating budget and current account deficits without compromising growth. Conversely, the outlook may revert to stable if deficits worsen due to unfavorable trade terms or policy slippages.
 

Source: S&P Global Ratings