Fitch Ratings, an international agency, has raised Uzbekistan's long-term foreign currency credit rating by one notch from “BB-” to “BB,” Nova24.uz reported.
This rating reflects the country's ability to repay its external debts on time. The higher the rating, the lower the risk of default on payments. The previous “BB-” rating was assessed as “speculative” or “not investment grade.”
The new “BB” rating indicates that Uzbekistan has become a more reliable country in the eyes of lenders. This increases the opportunity to obtain foreign loans at lower rates and attract foreign investors. The upgrade in the rating is linked to the pace of reforms and medium-term growth prospects.
The reforms include increasing confidence in monetary policy, enhancing the transparency of state institutions, and promoting privatization plans. The positive fiscal results in 2024 were influenced by the liberalization of energy tariffs and the reform of the subsidy system.
The agency predicts that economic growth will be around 6.3% in 2025–2026. This growth will be driven by ongoing reforms, stable demand for raw materials (especially gold), and an increase in remittance flows.
However, the agency also noted the risk of a downgrade in the rating. Such a situation could arise, for example, due to a sharp decline in remittances, falling raw material prices, and significant negative changes in the trade balance.
Additionally, a slowdown in the pace of economic growth, increased budget expenditures, a sharp depreciation of the national currency, or the fulfillment of guarantees provided by the state could have a negative impact.
Further improvement in the rating depends on the consistent and rapid implementation of reforms, macroeconomic stability, and improvements in the quality of governance.
