Press Release No. 25/397

Uzbekistan’s economy continues to perform strongly, and the outlook remains broadly positive, with risks largely balanced. This is an opportune time to advance the reform and policy agenda and build buffers to enhance resilience to shocks.

Tashkent: An International Monetary Fund staff team, led by Mr. Yasser Abdih, met with Uzbekistan’s authorities from November 17 to 25, 2025 to discuss economic developments, the outlook, and policy priorities. At the end of the mission, Mr. Abdih issued the following statement:

“Economic performance remains robust. Real GDP rose by 7.6 percent year-over-year (y/y) in the first three quarters of 2025 driven by buoyant investment and household consumption. Despite strong demand growth, headline and core inflation have eased in recent months—to 7.8 percent and 6.6 percent y/y, respectively, at end-October—as the effects of last year’s administrative energy price increases faded, the exchange rate appreciated, and monetary policy remained restrictive. Household lending has been strong, expanding by 23 percent y/y in September from a low base, while corporate lending grew modestly. The external current account deficit narrowed markedly in the first half of the year, underpinned by high gold prices, and robust non-gold exports and remittance inflows. At end-October, international reserves remained ample at 12 months of prospective imports.

“The outlook is broadly positive, with risks largely balanced. Real GDP growth is expected to exceed 7 percent this year and remain strong at around 6 percent in 2026, supported by robust consumption and investment. Inflation is projected to gradually converge to the Central Bank of Uzbekistan (CBU) 5 percent target by end-2027. Risks arise from procyclical spending of higher-than-budgeted revenues, including from gold, and pressures to expand directed and preferential lending programs, which could lead to overheating in an already high-demand environment. Downside external risks include an uncertain global outlook and geopolitics and commodity price volatility. On the upside, faster structural reform implementation, stronger capital and remittance inflows, and higher gold prices could further improve the outlook.

“Rapid economic growth, coupled with high gold prices, represent an opportune moment to bolster efforts to safeguard macro-financial stability, enhance resilience, and advance reforms for sustained growth.

It is critical to minimize government expenditure increases in response to higher-than-budgeted revenues, stemming from better-than-anticipated economic activity and elevated gold prices. The authorities remain committed to the consolidated fiscal deficit target of 3 percent of GDP this year and in 2026. The overperformance of revenue in 2025 has allowed for higher expenditures. Going forward, it is important to limit spending increases from revenue overperformance to contain inflationary demand pressures, prevent unwarranted real exchange rate appreciation, avoid an abrupt adjustment that may exacerbate macroeconomic volatility should gold prices fall, and build fiscal buffers.

There is a need to broaden the tax base and raise the tax revenue-to-GDP ratio. The authorities’ plan to implement a medium-term revenue strategy and adopt the Tax Committee Reform and the Strategy for Combating the Shadow Economy will help in this regard. Priorities should include limiting new tax incentives, introducing a methodology to measure tax expenditures and publishing the latter in the budget, strengthening on-site tax audits, and bolstering the power of the tax administration to enforce the tax code while respecting taxpayers’ rights.

It is paramount for monetary policy to remain firmly focused on reducing inflation. The CBU has appropriately maintained the policy rate at 14 percent since March 2025, even as headline and core inflation, as well as inflation expectations, have fallen. It should maintain a tight monetary stance until inflation is on a firm downward trend towards target. The welcome move towards more exchange rate flexibility since April 2025 supports inflation targeting and enhances resilience to external shocks. It should be sustained.

Financial sector reform should be accelerated. Strong economic growth provides a solid basis for accelerating the ongoing phase-out of directed and preferential lending. The CBU’s plan to strengthen bank regulation and supervision following the 2025 Financial Sector Assessment Program (FSAP) recommendations should be complemented by the adoption of a broader roadmap that covers the full set of FSAP recommendations, including those under the responsibilities of the Ministry of Economy and Finance and the regulators. This would facilitate proper sequencing of reforms and the provision of necessary technical assistance to support implementation.

Continuation of structural reforms remains key to sustaining strong growth. Privatizing and restructuring major SOEs, improving their governance, conditioning any financial support on credible restructuring plans, strengthening competition, and improving the business environment will foster a more dynamic private sector and reduce the state’s economic footprint. These reforms will also help boost productivity and support the economy from the supply side, thereby helping ease inflationary pressures. The authorities’ steady progress towards WTO accession, targeted for March 2026, is to be commended. Adoption and implementation of governance and anti-corruption reforms will further improve economic efficiency and the business environment. The implementation of the conflict-of-interest law and the progress towards parliamentary discussion of the Whistleblower Protection and Asset Declaration laws are welcome developments.

The mission would like to thank the authorities of Uzbekistan for their hospitality, cooperation, and fruitful discussions during our visit.

Uzbekistan: Selected Economic Indicators, 2024-26 1/

	2024	2025 Proj	2026 Proj
National income
Real GDP growth (percent change)	6.7	7.3	6.2
Nominal GDP (in trillions of Sum)	1,535	1,826	2,122
GDP per capita (in U.S. dollars)	3,265	3,845	4,464
Population (in millions)	37.2	38.0	38.7
Prices	(percent change)
Consumer price inflation (end of period)	9.8	8.0	6.5
GDP deflator	14.1	10.8	9.4
External sector	(percent of GDP)
Current account balance	-4.7	-3.3	-3.9
External debt	53.7	50.0	47.8
	(level)
Exchange rate (in sums per U.S. dollar; end of period)	12,920	…	…
Government finance	(percent of GDP)
Consolidated budget revenues	24.9	26.2	26.1
Consolidated budget expenditures	28.0	29.2	29.1
Consolidated budget balance	-3.1	-3.0	-3.0
Adjusted revenues 2/ 3/	23.9	25.0	24.5
Adjusted expenditures 2/ 3/	26.1	27.4	26.7
Adjusted fiscal balance	-2.2	-2.4	-2.2
Policy-based lending 3/	0.9	0.6	0.8
Overall fiscal balance	-3.1	-3.0	-3.0
Public debt	30.9	28.3	28.3
Money and credit	(percent change)
Reserve money	9.5	11.9	10.0
Broad money	30.6	23.3	18.9
Credit to the economy	14.0	15.1	16.5

Sources: Country authorities; and IMF staff estimates and projections.

1/ Incorporates the November 2025 revision to national accounts data.

2/ IMF staff adjusts budget revenues and expenditures for financing operations, such as equity injections and policy lending.

3/ The coverage of government social loan programs was expanded in the 2026 budget resulting in larger adjustments to consolidated revenue and expenditure and higher net lending.