Uzbekistan's public debt jumps to $34.9bn, exceeding expectations

Uzbekistan's public debt jumps to $34.9bn, exceeding expectations
/ bne IntelliNews
By Mokhi Sultanova in Tashkent June 2, 2024

Uzbekistan's public debt jumped to $34.9bn as of January 1, marking an increase of $5.7bn over the past year, according to a report released by the Ministry of Economy and Finance.

The surge in debt exceeded expectations by $2.8bn. 

By the end of 2023, the public debt had reached 38.4% of the country's GDP, an increase from 36.4% in 2022.

The public external debt rose by $3.73bn in 2023, reaching $29.64bn, equivalent to 32.6% of GDP. 

Government-raised debt amounted to $23.91bn, while there was an additional $5.72bn guaranteed by Uzbekistan.

Meanwhile, the state's domestic debt moved up by $1.97bn to $5.29bn, or 5.8% of GDP. State securities accounted for $1.78bn, with the remainder amounting to $3.51bn guaranteed by the state.

The distribution of loans across sectors revealed that nearly 50% of the debt was allocated to budget support and energy projects. The state budget support accounted for $11.6bn, representing 33.2% of the total debt.

Uzbekistan's creditors included international financial institutions (IFIs) such as the World Bank, Asian Development Bank (ADB) and the Islamic Development Bank (IsDB), among others. 

The World Bank and ADB have provided loans totalling $6.6bn and $6.4bn, respectively. 

Other lenders include the IsDB ($0.9bn), global investors ($3.4bn through eurobonds), the Japan International Cooperation Agency, or JICA ($2bn), and Eximbank of China ($1.9bn).

The debt was denominated in various currencies, with the US dollar comprising 71.4% of the foreign debt structure.

Interest payments on the state debt increased in 2023 due to increasing interest rates on international financial markets, reaching $1.12bn. 

The government allocated funds to service the debt, with a total of $2.82bn directed towards debt repayment and interest payments, marking a 68.8% increase from the previous year.

Looking ahead, Uzbekistan plans to repay UZS32.27 trillion ($2.6bn) of debt and pay UZS16.38 trillion ($1.3bn) in interest in 2024, with the payments to total 3.7% of GDP.

The surge in public debt comes against the backdrop of a record budget deficit of UZS59 trillion ($4.7bn) in 2023, which prompted the government to raise spending limits. In the first four months of 2024, the state budget deficit stood at UZS25.5 trillion ($2bn).