TASHKENT, Uzbekistan, June 30. International
credit rating agency Fitch Ratings projects that Uzbekistan’s net
external creditor position will reach 21 percent of GDP in 2025,
down from 44 percent in 2020, Trend reports.
Despite the decline, it remains a notable strength compared to
the median for countries rated in the ‘BB’ category.
Despite the persistent high levels of commodity reliance—wherein
commodity exports constitute approximately 30 percent of the
prevailing external revenue streams in 2024—the nation’s export
framework is progressively evolving towards diversification. The
proportion of services within the aggregate export framework
escalated to 25 percent in 2024, an increase from 14 percent in
2021, indicative of a transition towards a more equilibrated and
robust economic paradigm.
Inflationary dynamics are moderating, although the inflation rate
continues to exceed the established benchmark. In 2025, the Central
Bank of Uzbekistan elevated its benchmark interest rate by 50 basis
points to 14 percent, aligning with its ongoing shift towards an
inflation-targeting paradigm. Fitch anticipates a contraction in
the inflationary trajectory, projecting a descent to an average of
7 percent by 2026, a reduction from the approximately 9 percent
benchmark established in 2024, albeit remaining elevated relative
to the central bank’s medium-term objective of 5 percent. In May
2025, the inflationary trajectory decelerated to approximately 9
percent on a year-over-year basis, following a zenith of around 10
percent in March. This moderation can be attributed primarily to a
contraction in price escalations within the services sector, which
constitutes 23 percent of the Consumer Price Index (CPI)
basket.
The banking sector remains stable and well-capitalized. As of
the end of 2024, the return on equity was close to 7 percent, and
the capital adequacy ratio stood at approximately 17 percent. The
regulatory non-performing loan (NPL) ratio remained low at 4
percent, although Fitch estimates the share of impaired loans under
IFRS standards was closer to 10 percent.
Financial dollarization continues to decline, with deposit
dollarization falling to 24.5 percent in March 2025, down from
roughly 40 percent in early 2020. At the same time, the share of
state-subsidized lending fell to 23 percent of total loans in April
2025, compared to 28 percent in June 2024, driven by ongoing
financial sector reforms. However, the remaining volume still
limits the effectiveness of monetary policy transmission.
Overall, Uzbekistan’s economic fundamentals remain strong,
supported by robust external buffers, a commitment to structural
reforms, and prudent macroeconomic policies. These strengths
position the country well to withstand external shocks and maintain
sustainable growth in the medium term.
