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Fitch Ratings: Uzbekistan’s institutional performance is gradually improving as a result of reforms

Experts of the international rating agency “Fitch Ratings” on Thursday held a webinar with the participation of specialists from the Ministry of Finance, dedicated to the macroeconomic prospects and the banking sector of Uzbekistan. More than 80 foreign investors, representatives of international banks and organizations, and the media took part in it.

In their presentations, the representatives of Fitch Ratings noted that despite the 2020 pandemic in Uzbekistan, GDP growth was 1.6 percent, annual inflation decreased from 15.2 percent to 11.1 percent, and a sharp increase in the budget deficit was prevented.

In their opinion, this reflects the stable macroeconomic situation in the country. In addition, Fitch Ratings Senior Director Eric Arispe said that in the context of the global crisis and the downgrade of sovereign credit ratings, Uzbekistan’s credit rating in 2020 remained at ‘BB-‘ (Stable Expectations). According to an international expert, this was particularly influenced by Uzbekistan’s external and fiscal reserves, including net sovereign foreign assets, higher than those of countries with a BB rating, a moderate level of liquid assets of the Fund for Reconstruction and Development and the government, as well as the stability of public finances and growth rates. Along with this, Eric Arispe emphasized the government’s rapid anti-crisis measures, attracting external financing and the specifics of the economy, as the main factors of economic growth in Uzbekistan

Despite the growth of public debt in recent years, the dynamics of public debt is below the value of countries rated ‘BB’. At the same time, they expressed confidence that the established limits on public debt would lead to its stabilization in the medium term.

The representative of the international rating agency Fitch Ratings emphasized the need for a coordinated fiscal and monetary policy to maintain the macroeconomic balance, finance the current account deficit, mainly through foreign direct investment, and ensure a moderate level of lending to the economy.

It was noted that as a result of the reforms carried out in the country in recent years, the country’s institutional indicators are gradually improving.