Fitch Affirms Uzbekistan’s Sovereign Rating at ‘BB’ and Revises Outlook to Positive

According to Fitch, the Outlook revision reflects the consistent progress of economic reforms, strengthened macroeconomic stability, and improvements in the country’s key financial indicators.

The agency notes that ongoing reforms are creating a solid foundation for sustaining strong economic growth and further enhancing economic resilience over the medium term.

Reforms Strengthen Economic Potential

Fitch highlights continued progress in structural reforms aimed at improving market efficiency, strengthening public financial management, fostering competition, and advancing privatization.

Between 2021 and 2025, Uzbekistan privatized state assets worth approximately $5.1 bn, including nearly $1.9 bn in 2025 alone.

An additional confirmation of reform success was the first international IPO of the Uzbekistan National Investment Fund (UzNIF) on international capital markets on 13 May 2026. By offering size, the transaction ranked among the largest IPOs in Europe this year.

Uzbekistan Maintains Strong Growth Momentum

Fitch forecasts Uzbekistan’s economy to grow by around 6% in 2026 and accelerate to an average of 6.4% in 2027–2028.

At the same time, according to CERR estimates, Uzbekistan’s real GDP growth reached 8.7% in the first quarter of 2026, up 1.9 percentage points from the same period last year. This exceeded earlier expectations and marked the strongest quarterly performance in the past year.

Fitch notes that despite continued uncertainty in the global economy and ongoing geopolitical tensions, Uzbekistan’s projected growth rates remain substantially higher than those of most countries in the ‘BB’ rating category.

Fiscal Discipline Continues to Strengthen

One of the key drivers behind the Outlook revision was the strong performance of fiscal policy.

According to Fitch, the consolidated budget deficit stood at 2.1% of GDP in 2025, below the established ceiling of 3% of GDP.

Budget revenues benefited from higher tax collections and stronger commodity-related income. Direct and indirect tax revenues exceeded budget targets by 11%, while other tax and non-tax revenues surpassed plans by 35%.

The agency expects the fiscal deficit to remain within 3% of GDP over the medium term.

Government Debt Remains Among the Lowest in the Peer Group

Fitch projects government debt to gradually decline from 32% of GDP to around 28% of GDP by 2027–2028. This is almost twice lower than the average debt level for countries rated ‘BB’, estimated at approximately 53% of GDP.

The agency emphasizes that Uzbekistan’s low debt burden remains one of the country’s key strengths and an important pillar of macroeconomic stability.

International Reserves Reach Record Levels

Fitch places particular emphasis on the strengthening of Uzbekistan’s external position.

According to the agency’s forecasts, international reserves are expected to increase to $71 bn, compared with $66 bn in 2025 and $42 bn at the end of 2024.

The current reserve stock provides coverage of external payments for approximately 11 months, more than double the average level for countries in the ‘BB’ rating category.

Financial System Becomes More Resilient

Fitch notes continued progress in reducing dollarization. The share of foreign-currency deposits has declined to around 23%, compared with 40% in 2020.

The banking sector remains highly resilient. The capital adequacy ratio reached 18.3%, while the share of foreign-currency loans declined to 39.2%, compared with 45% at the end of 2023.

The agency also highlights the ongoing reduction in subsidized lending and the strengthening of market-based financing mechanisms.

Inflation Continues to Decline

According to Fitch, inflation stood at 7% in April 2026, continuing its gradual convergence toward the Central Bank’s medium-term target of 5%.

The agency notes that lower dollarization and the continued implementation of inflation targeting are creating additional conditions for improving the effectiveness of monetary policy.

Conclusion

Fitch’s decision to revise Uzbekistan’s sovereign rating Outlook to Positive reflects growing confidence among international investors in the country’s reform agenda and economic resilience.

The affirmation of the ‘BB’ rating alongside the Outlook upgrade highlights the progress achieved in strengthening macroeconomic stability, public financial management, market institutions, and the country’s overall investment attractiveness.

CERR Public Relations Sector