For the first time in seven years, the international rating agency S&P has upgraded Uzbekistan's sovereign credit rating from "BB-" to "BB". This was reported by Zamin.uz.
The outlook for this rating was assessed as "stable". According to the agency, the policies implemented in the country's economy have been steadily strengthening in recent years.
In particular, reforms carried out in the energy sector, changes in the tariff system, and measures to ensure transparency can serve as examples. Additionally, the government's focus on several large investment projects has also been positively evaluated.
Uzbekistan's public debt is noted to be at a low level compared to other countries. This is due to the long-term repayment terms and low interest rates on external debts.
These debts are mainly directed towards financing large strategic projects. Nevertheless, the agency warned that if external debt and budget deficits exceed expectations, the rating could be downgraded.
At the same time, high budget expenditures and an increase in debt levels may negatively impact the rating. Reducing the budget deficit without harming the economy has been identified as an important factor for further rating upgrades.
However, the low per capita GDP level, volatility in raw material prices, and limited flexibility of monetary policy have been mentioned as factors slowing down the rating's growth. S&P also noted that Uzbekistan's gold and foreign exchange reserves have increased due to the high prices of precious metals, especially gold.
According to data, gold and other metals account for about 40 percent of the country's exports.
