The implications of President Shavkat Mirziyoyev’s re-election for Uzbekistan’s sovereign credit profile will depend on the effects on governance and the continued implementation of Mirziyoyev’s reform agenda, Fitch Ratings has said.

“The president could remain in office for another 14 years, with potentially negative implications for political accountability, but his government appears committed to reforming institutions as it seeks to shift to a more market-based economy,” the credit rating agency observed.

Mirziyoyev was re-elected as president following early elections held on July 9. 

“We believe the impact on the quality of governance and independence of institutions of extending Mirziyoyev’s rule will only become evident over time. Uzbekistan’s World Bank Worldwide Governance Indicators (WBGI) improved by 9pp in the 2021 ranking, to the 29th percentile overall, narrowing the gap with the ‘BB’ category median by 10pp. Further improvement in governance standards and an easing in political risk is a key positive rating sensitivity,” Fitch also noted.

“There are signs that the government has become more responsive to public sentiment around governance in recent months. In January, Mirziyoyev dismissed the influential mayor of Tashkent following widespread public anger over energy shortages. There is currently strong momentum to reduce the size of the cabinet and bureaucracy, and introduce performance-linked standards to career progression,” Fitch added.

The ratings agency forecast Uzbekistan’s GDP growth would remain robust at 4.7% in 2023, before rising to 6% in 2024 and 5.8% in 2025 on strong investment growth (partly financed by international financial institutions), continued robust remittance inflows from Russia, and falling inflation (which may support energy tariff reform).