International rating agency S&P Global Ratings has affirmed Uzbekistan’s long-term sovereign credit rating at “BB-” with “stable” outlook, the agency said in a statement.
The short-term credit rating was affirmed at “B”.
According to the agency, at the next stage of reforms implemented in Uzbekistan, the new tariff policy aimed at ensuring energy security and efficiency, and the reduction of budget subsidies deserve special attention.
S&P notes that the “Uzbekistan – 2030” strategy attracts investments in transport, telecommunications, agriculture, tourism and other sectors, reforms the energy sector, privatization and improvement of fiscal policy.
Thanks to investments in electricity and gas production, green energy and mining, as well as reforms aimed at creating a market economy, S&P forecasts Uzbekistan’s GDP growth to average above 5% per year in 2024-2027.
According to S&P estimates, gradual reduction of the budget deficit will be achieved starting from 2024 by increasing the targeting of subsidies and social spending and abolishing some tax exemptions.
The report also notes that the law “On State Debt” sets the upper limit of state debt and there are annual limits on newly attracted foreign debt.
According to the agency’s report, Uzbekistan’s sovereign credit rating may be upgraded and the outlook may be improved if reforms lead to higher-than-expected economic growth in the medium term and have a positive impact on the sector’s fiscal and external indicators.
Factors downgrading the country’s credit rating are the rapid growth of the country’s total external debt, increased fiscal and balance of payments risks due to failure to achieve the expected results of projects financed by external loans.
