S&P Global Ratings has affirmed the long-term and short-term sovereign credit ratings of Uzbekistan in foreign and national currencies at BB-/B with a stable outlook. The report is published on the organization’s website.

The document notes that the economy of Uzbekistan withstood the consequences of the Russian-Ukrainian war better than experts had previously assumed. This happened due to a stronger growth in remittances from Russia this year. S&P analysts believe the increase partly reflects the outflow of human capital from Russia, as some Russians have decided to move and move some of their savings to Uzbekistan.

“Unusually high remittances from Russia are unlikely to continue. Combined with the continued negative regional impact of the ongoing war, weak global economic growth and monetary tightening could pose additional risks to the growth and financing conditions of emerging markets, including Uzbekistan, from 2023 onward.

The Stable Outlook on Uzbekistan’s rating reflects experts’ expectations that Uzbekistan’s strong fiscal and external buffers will help the economy withstand possible negative spillovers from the Russian-Ukrainian conflict and weak global growth during the year.

The agency could downgrade the rating if Uzbekistan’s fiscal and external position worsens more than currently expected. Such a result is possible, for example, in the case of more significant consequences of the military actions of the Russian Federation and Ukraine for Uzbekistan through the channel of trade and money transfers. The rating revision is also possible in case of a rapid growth of external debt of the public and financial sectors.

Uzbekistan’s ratings could also come under pressure if the financial performance of key SOEs weakens, leading to a transfer of liabilities to the state.

S&P predicts that Uzbekistan’s GDP will grow by 5.8% this year compared to 7.4% last year. Analysts assume that economic and managerial reforms in Uzbekistan will continue, including plans for the partial privatization of several state-owned enterprises. But the decision-making process in the republic will remain centralized, and the perception of corruption will be high (albeit with a tendency to improve).

Earlier, Fitch Ratings affirmed Uzbekistan’s long-term foreign currency rating at ‘BB-‘ with a ‘Stable’ outlook.

Source: Курсив