Uzbekistan: Staff Concluding Statement of the 2026 Article IV Mission
IMF News, April 13, 2026
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- Published: April 13, 2026
Recent developments, outlook, and risks
- Real GDP growth reached 7.7 percent in 2025, driven by robust consumption and investment; unemployment declined by 0.7 percentage points to 4.8 percent.
- Growth was broad‑based, with services and construction expanding the fastest.
- Headline CPI inflation declined to 7.3 percent year‑on‑year (y/y) at end‑2025, from 9.8 percent a year earlier; core inflation fell by 1.5 percentage points over the same period.
- Contributing factors to disinflation: fading effects of the May 2024 energy price increases, a 6.9 percent appreciation of the sum against the U.S. dollar, and an appropriately tight monetary policy stance.
- Current account deficit narrowed to 3.9 percent of GDP in 2025; international reserves around 13 months of imports.
- Fiscal deficit declined to 2.1 percent of GDP in 2025, below the 3 percent target.
- Outlook:
- Real GDP growth projected at 6.8 percent in 2026 and around 6 percent in 2027.
- Current account deficit forecast to narrow further in 2026, then widen modestly in 2027.
- Inflation projected to remain above the CBU’s 5 percent target in 2026 and reach the CBU’s target in 2027.
- Key risks:
- External: impact of the war in the Middle East (duration and intensity), heightened geopolitical tensions, trade disruptions, commodity price volatility, and an uncertain global outlook.
- Domestic: pressures for procyclical spending or directed/preferential lending, potential weakening of bank balance sheets, and contingent liabilities from SOEs, SOCBs, and PPPs.
- Upside: faster implementation of structural reforms; limited scope for further gains from stronger capital and remittance inflows or higher gold prices given current favorable levels.
Fiscal policy (findings and recommendations)
- Findings:
- Better‑than‑budgeted fiscal deficit in 2025.
- Budget prudent revenue assumptions, particularly for gold prices.
- Recommendations:
- Minimize within‑year spending increases in 2026 to contain inflationary pressures.
- Any Middle East war-related measures should avoid generalized subsidies and price controls; measures should be temporary and targeted to affected vulnerable groups.
- Continue efficiency‑enhancing expenditure reforms: rationalize the wage bill, gradually phase out budgetary support to SOEs, implement procurement reforms, consolidate social assistance programs while protecting the most vulnerable.
- From the 2027 budget, adopt a ceiling on the nominal non‑mineral primary deficit to strengthen management of volatile mineral revenues, complementing the 3-percent overall deficit target.
- Advance a medium‑term revenue strategy to address the decline in the tax‑to‑GDP ratio since 2020 via a balanced mix of tax policy and revenue administration measures:
- Policy: increase specific excise tax rates; phase out and not grant new income‑based tax incentives—tax holidays and reduced corporate income tax (CIT) rates; eliminate CIT and non‑statutory customs duty exemptions.
- Administration: approve and implement the Tax Administration Reform Strategy 2025–30; implement a customs reform strategy prepared with IMF capacity development support.
- Prevent accumulation of VAT refund arrears and resolve the existing stock; roll out the VAT invoice risk assessment system to facilitate prompt automatic payment of validated claims.
- Strengthen fiscal institutions:
- Advance automation of treasury processes for timely budget execution reports.
- Publish tax expenditures alongside the budget.
- Tighten the annual cap on PPP commitments, standardize PPP contract provisions, strengthen the Ministry of Economy and Finance’s information base and enforcement authority over PPPs.
- Enhance SOE risk disclosure in budget documents.
Monetary and exchange rate policy
- Findings:
- CBU held the policy rate at 14 percent since March 2025, maintaining strongly positive real interest rates.
- Pace of disinflation slowed recently; core inflation edged up to 6.3 percent y/y at end‑February.
- Exchange rate flexibility increased in April 2025.
- Recommendations:
- Monetary policy should remain firmly focused on reducing inflation to the CBU’s 5 percent target.
- Keep policy stance sufficiently tight; further tightening warranted if core inflation and inflation expectations do not resume a downward trend.
- Strengthen monetary transmission through an expanded set of liquidity management instruments, enhanced liquidity forecasting, and clearer communication.
- Maintain increased exchange rate flexibility to strengthen shock‑absorption capacity, safeguard international reserves, encourage FX hedging, and facilitate the transition toward inflation targeting.
Financial sector policy
- Findings:
- Persistent underperformance by state‑owned commercial banks (SOCBs); decision to broaden asset quality reviews to all SOCBs; alignment of non‑performing loan measurement with international standards.
- Macroprudential measures adopted to contain risks, including from microlending.
- Exemptions from borrower‑based measures currently cover about 15 percent of loans.
- Recommendations:
- Accelerate reform and privatization of SOCBs, adhering to international best practices:
- Preparatory steps: accurate asset quality reporting; strengthen corporate governance and risk‑management frameworks.
- Use transparent procedures and competitive bidding to attract strategic investors.
- Define clear KPIs, robust performance monitoring, and full accounting and risk‑based separation of commercial and non‑commercial lending.
- Take timely corrective actions for underperforming SOCBs, restructure or resolve non‑viable banks.
- Reconsider plans to retain systemic SOCBs as policy banks due to financial stability risks and budgetary costs.
- Timely implement 2025 FSAP recommendations; government adoption of the FSAP Roadmap recommended.
- Key FSAP priorities: phase out and improve transparency of directed/preferential lending; safeguard the CBU’s operational independence; ensure accurate asset classification; strengthen solvency stress testing.
- Ensure credible restructuring plans before any potential capital support to SOCBs.
- Phase out exemptions from borrower‑based measures and extend such measures to loans under government programs.
- Address risks from foreign‑exchange lending to unhedged borrowers, particularly with increased exchange rate flexibility.
- Pursue financial inclusion without compromising stability: avoid interest rate ceilings; strengthen banking sector competition; expand access to credit information; improve banks’ credit screening; modernize payment systems and digital infrastructure; foster economies of scale; enhance financial literacy and consumer protection.
Structural and governance reforms
- State‑owned enterprises (SOEs):
- Findings: Most SOEs operate in competitive sectors; private firms have documented efficiency advantages.
- Recommendations:
- Privatize profitable SOEs in competitive sectors; liquidate non‑viable SOEs with support for affected workers.
- For SOEs in strategic or non‑competitive sectors, address corporate governance weaknesses and soft budget constraints:
- Clarify ownership policies with explicit market‑based rates of return.
- Ensure transparent appointment and evaluation of supervisory boards.
- Prohibit non‑commercial activities unless fully compensated through the budget.
- Increase private sector participation.
- Ensure compliance with international auditing and financial reporting standards.
- Ensure the National Investment Fund has a clear mandate, operational autonomy, and adequate capacity to restructure SOEs and attract institutional investors.
- Governance, labor, and climate:
- Recommendations:
- Enact and effectively implement legislation on whistleblower protection and asset declaration.
- Labor market reforms to address low female labor force participation, high informality, and skill mismatches.
- Integrate climate objectives into public investment management to enhance energy efficiency, decarbonization, and climate adaptation.
- Strengthen market regulation and competition: activate sector regulators, eliminate exclusive rights in key sectors, and complete WTO‑related reforms.
Selected economic indicators (2023–2027)
- Real GDP growth (percent change): 6.3 (2023); 6.7 (2024); 7.7 (2025 Est.); 6.8 (2026 Proj.); 6.0 (2027)
- Nominal GDP (in trillions of Sum): 1,262 (2023); 1,535 (2024); 1,850 (2025 Est.); 2,154 (2026 Proj.); 2,465 (2027)
- GDP per capita (in U.S. dollars): 2,922 (2023); 3,232 (2024); 3,846 (2025 Est.); 4,528 (2026 Proj.); 4,957 (2027)
- Population (in millions): 36.8 (2023); 37.5 (2024); 38.2 (2025 Est.); 38.9 (2026 Proj.); 39.7 (2027)
- Consumer price inflation (end of period, annual percent change): 8.8 (2023); 9.8 (2024); 7.3 (2025 Est.); 5.0 (2026 Proj.)
- GDP deflator (annual percent change): 13.9 (2023); 14.1 (2024); 11.9 (2025 Est.); 9.0 (2026 Proj.); 8.0 (2027)
- Current account balance (percent of GDP): -7.3 (2023); -4.7 (2024); -3.9 (2025 Est.); -3.2 (2026 Proj.); -3.6 (2027)
- External debt (percent of GDP): 50.8 (2023); 53.1 (2024); 54.2 (2025 Est.); 51.8 (2026 Proj.); 49.5 (2027)
- Exchange rate (in sums per U.S. dollar; end of period): 12,339 (2023); 12,920 (2024); 12,025 (2025 Est.)
- Real effective exchange rate (ave 2015=100, decline = depreciation): 59.9 (2023); 56.9 (2024); 58.7 (2025 Est.)
- Consolidated budget revenues (percent of GDP): 25.6 (2023); 25.2 (2024); 27.2 (2025 Est.); 28.2 (2026 Proj.); 27.7 (2027)
- Consolidated budget expenditures (percent of GDP): 30.2 (2023); 28.1 (2024); 29.3 (2025 Est.); 29.7 (2026 Proj.)
- Consolidated budget balance (percent of GDP): -4.6 (2023); -3.0 (2024); -2.1 (2025 Est.); -1.5 (2026 Proj.); -2.0 (2027)
- Adjusted revenues (percent of GDP): 24.8 (2023); 24.2 (2024); 25.7 (2025 Est.); 26.7 (2026 Proj.); 26.3 (2027)
- Adjusted expenditures (percent of GDP): 28.6 (2023); 27.4 (2024); 27.5 (2025 Est.)
- Adjusted fiscal balance (percent of GDP): -3.8 (2023); -1.6 (2024); -0.7 (2025 Est.); -1.1 (2026 Proj.)
- Policy-based lending (percent of GDP): 0.8 (2023); 0.9 (2024); 0.5 (2025 Est.)
- Public debt (percent of GDP): 30.7 (2023); 30.9 (2024); (2025 Est. value not listed)
- Reserve money (percent change): 4.9 (2023); 9.5 (2024); 23.2 (2025 Est.); 11.0 (2026 Proj.)
- Broad money (percent change): 12.2 (2023); 30.6 (2024); 36.6 (2025 Est.); 18.4 (2026 Proj.); 15.4 (2027)
- Credit to the economy (percent change): 14.0 (2023); 15.3 (2024); 16.7 (2025 Est.); 15.7 (2026 Proj.)
Source: Uzbekistan: Staff Concluding Statement of the 2026 Article IV Mission (April 13, 2026), IMF staff.