According to Fitch’s official statement, the rating upgrade reflects the country’s strong progress on structural reforms and favorable medium-term growth prospects that support macroeconomic stability and improvements in Uzbekistan’s credit profile. Key reforms include energy tariff liberalization, subsidy rationalization, increased institutional independence, and progress in privatization.
Fitch projects that Uzbekistan’s real GDP will grow by 6.3% in both 2025 and 2026, significantly above the ‘BB’ median of 3.8%.
Prudent fiscal management has been another major factor supporting the upgrade. Uzbekistan’s consolidated budget deficit in 2024 stood at just over 3% of GDP, outperforming the government’s target of 4%. This result was driven by a broad-based increase in revenue and a significant reduction in energy subsidies, which were halved to below 1% of GDP.
In addition, state-owned enterprise (SOE) reforms have gained momentum. The number of SOEs has been reduced, and the state’s shares in 18 enterprises were transferred to the National Investment Fund, established in August 2024. Several large SOEs underwent restructuring to enhance governance and operational transparency.
Fitch expects the budget deficit to remain around 3% of GDP in 2025–2026, with further improvements in tax administration providing an additional fiscal buffer.
Fitch forecasts that Uzbekistan’s government debt-to-GDP ratio will remain around 32% in 2025 and 2026, significantly below the ‘BB’ peer median of 54%. Moreover, about 89% of public debt is denominated in foreign currency, much of it on concessional terms. The average maturity of external debt exceeds nine years.
Uzbekistan’s official foreign exchange reserves, including gold, reached $49.7 billion as of June 1, 2025, up from $41 billion at the end of 2024. According to Fitch, this provides coverage of approximately 10 months of external payments, double the median level for ‘BB’-rated countries.
The growth in reserves has been largely driven by higher global gold prices, with gold accounting for around 77% of total FX reserves.
Uzbekistan’s export structure continues to diversify. The share of service sector in total exports increased from 14% in 2021 to 25% in 2024. At the same time, deposit dollarization fell to 24.5% in March 2025 (down from 40% in 2020), and the share of subsidized loans declined to 23% in April 2025 (from 28% a year earlier). These trends support improved monetary policy transmission and financial system stability.
Inflation in Uzbekistan continues to decline. In May 2025, annual inflation fell to just under 9%, down from around 10% in March, largely due to slowing price growth in the services sector. Fitch projects inflation will average 7% in 2026, although it will remain above the central bank’s medium-term target of 5%.
According to Fitch, Uzbekistan’s banking sector remains stable and moderately profitable. Return on equity stood at approximately 7% by the end of 2024, while the capital adequacy ratio was about 17%. The regulatory non-performing loan ratio was 4%, although Fitch estimates the IFRS-based impaired loan ratio at closer to 10%.
Fitch highlights that declining dollarization, reduced reliance on subsidized lending, and ongoing banking reforms have strengthened the sector’s resilience and enhanced the central bank’s ability to influence the economy via interest rates and credit channels.
The upgrade of Uzbekistan’s sovereign rating is not merely a technical adjustment – it reflects international recognition of the country's reform momentum, effective governance, and stable macroeconomic trajectory. This sends a strong signal to investors, partners, and society at large: Uzbekistan is becoming a country where structural reforms deliver real and tangible outcomes.
CERR Public Relations and Media Sector
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