On June 13 of this year, the international rating agency “Moody’s” published its latest report on Uzbekistan’s sovereign credit rating. According to the report, the republic’s credit rating was affirmed at “Ba3” (“BB-“), and the rating outlook was raised from “stable” to “positive.”

On May 23 of this year, the S&P rating agency had also upgraded Uzbekistan’s sovereign credit rating outlook from “stable” to “positive.”

Since the beginning of this year, the international rating agency “Moody’s” has lowered the sovereign credit rating or outlook for 11 countries and raised it for 12 countries.

The Moody’s report emphasizes that the upgrade of Uzbekistan’s sovereign credit rating outlook to “positive” is associated with the improved effectiveness of economic policy and the quality of institutions through ongoing institutional reforms.

In particular, it was noted that the ongoing reforms in the energy sector demonstrate the potential and determination of Uzbekistan’s leadership to implement complex reforms in the future.

In particular, special attention was paid to the fact that in 2027-2028, tariffs were increased to achieve cost recovery levels for electricity and gas, wages and pensions were raised several times to protect the population from the impact of inflation, and subsidies allocated to state enterprises were reduced.

The Agency acknowledged efforts to improve governance, including increasing the share of independent board members in the supervisory boards of state-owned enterprises to 25%, in state-owned banks to 40%, and setting a goal to increase this share to over 50% in state-owned banks by 2027.

The adoption of the Law “On Conflict of Interest” to curb corruption and improve governance quality was positively assessed. Additionally, the development of draft laws “On Declaration of Income and Property of Civil Servants” and “On Protection of Persons Reporting Corruption Offenses,” as well as the continuous improvement of data openness and transparency, were viewed favorably.

The report highlights that the National Investment Fund was established in 2024 based on the transfer of shares from 18 large state-owned enterprises and banks, and is managed by Franklin Templeton. It was also noted that public offerings of shares for 29 large state-owned enterprises are planned.

The report notes that Uzbekistan’s economic growth in 2024 was 6.5%, and economic growth rates will remain stable in the medium term. The agency forecasts economic growth of 5.8% in 2025 and 5.7% in 2026.

It was emphasized that, in accordance with the “Uzbekistan – 2030” strategy, increasing investments in infrastructure, particularly in the energy and transport sectors, will stimulate economic growth.

According to the Moody’s report, as a result of reduced subsidies in the energy sector, more targeted allocation of social expenditures, and the formation of favorable price conditions for export goods, the budget deficit decreased from 4.9% of GDP in 2023 to 3.3% in 2024.

The agency forecasts that in 2025-2027, the budget deficit will not exceed 3% of GDP, and the volume of public debt will not exceed 40% of GDP.

According to Moody’s, Uzbekistan’s sovereign credit rating will be upgraded in the following cases:

– if reforms aimed at improving governance and institutional systems strengthen the country’s long-term economic growth potential;

– if fiscal stability is maintained and economic competitiveness is enhanced without sharply increasing social spending, while continuing the privatization of large state-owned enterprises and banks.

Source: Information Service Ministry of Economy and Finance Republic of Uzbekistan