Uzbekistan’s foreign exchange reserves may shrink in the coming years due to a projected decline in global gold prices, according to a report by S&P Global Ratings. As of May 1, Uzbekistan’s reserves stood at $49.3 billion—equivalent to 15 months of imports—but could drop to $36.3 billion by 2026 and $30 billion by 2028. Gold accounts for about 77% of the country’s reserves, exposing them to significant market volatility, Gazeta.uz reports.
In recent years, Uzbekistan has invested heavily in energy, mining, infrastructure, and social spending. From 2020 to 2024, the country’s net government debt grew by an average of 6.1% of GDP annually, driving up both public and external debt. Gross government debt reached 33% of GDP in 2024 and is expected to rise to 40% by 2028.
S&P projects the budget deficit will narrow to 3% of GDP in 2025, down from 3.3% in 2024 and 4.9% in 2023. High global commodity prices—especially for gold and copper—continue to boost budget revenues, with around one-third of revenues linked to commodity exports.
However, the report warns of risks: state-owned enterprises (SOEs) have significantly increased their foreign currency borrowing, equivalent to 4.6% of GDP in 2024. If these debts are absorbed into the state budget, fiscal pressures could mount. The share of domestic debt in total government debt has grown from 11% in 2022 to 16% in 2024, helping to mitigate currency risks.
Interest payments on government debt rose 77% in 2024, driven by an increase in commercial borrowing and the shift from LIBOR to SOFR. However, due to the high share of concessional loans (74% of total debt), interest costs are expected to remain below 5% of budget revenues over the next three years.
The government’s liquid assets have declined from 33% of GDP in 2017 to 9.3% in 2024, reducing its ability to cover budget deficits or debt servicing needs. Most of these assets are held by the Uzbekistan Fund for Reconstruction and Development (UFRD), but domestic assets (loans to SOEs and equity in banks) are considered largely illiquid and unlikely to be used for debt repayment.
S&P highlights growing external vulnerabilities: the current account deficit is projected to widen from 5% of GDP in 2024 to 6.2% by 2028, driven by weaker remittance inflows, falling gold prices, and persistent high import levels. Since October 2023, Uzbekistan has also become a net importer of gas, purchasing supplies from Russia via Kazakhstan.
While gold accounted for 38% of Uzbekistan’s exports in 2024, the agency expects prices to ease from current record highs, although they are likely to remain historically elevated due to geopolitical tensions and global trade uncertainties.
Foreign debt is also increasing across the public, corporate, and banking sectors. S&P anticipates that external borrowing will continue to be the main source of financing for the current account deficit. Foreign direct investment (FDI) is expected to grow gradually as the government’s privatization program progresses, though timelines will depend on market conditions.
Despite projected declines, S&P believes Uzbekistan’s reserves will remain sufficient to cover approximately seven months of external payments between 2025 and 2028. However, the heavy reliance on gold makes the reserves vulnerable to price fluctuations.
The agency does not include UFRD’s external assets in the Central Bank’s reserves calculations, as they are primarily used for fiscal purposes, not for monetary policy or balance of payments support—a fact confirmed by the use of UFRD funds for infrastructure projects and SOE support over the past four years.
CentralasianLIGHT.org
27 мая 2026 года