Uzbekistan Business & Economy - The Times Of Central Asia

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International Monetary Fund

IMF Growth Forecast for Uzbekistan Warns of Inflation and Global Risks

Uzbekistan’s economy performed strongly in 2025, with the International Monetary Fund (IMF) reporting growth across sectors. Inflation fell and the fiscal deficit narrowed. The Fund urged policymakers to keep monetary policy tight and continue reforms as geopolitical tensions and global uncertainty add risks. Uzbekistan’s real GDP expanded by 7.7% in 2025, driven by strong domestic consumption and investment. The unemployment rate fell by 0.7 percentage points from the previous year to 4.8%. Growth was supported by rapid expansion in services and construction. Consumer price inflation declined from 9.8% at the end of 2024 to 7.3% at the end of 2025. The IMF attributed the improvement to the fading impact of energy price increases introduced in 2024 and the appreciation of the Uzbek som against the U.S. dollar. Tight monetary policy by the Central Bank also helped bring down inflation. Core inflation declined during the year. External balances improved as the current account deficit narrowed to 3.9% of GDP. Strong exports and remittance inflows supported the decline. High commodity prices also helped. International reserves remained at comfortable levels, equivalent to around 13 months of imports. The fiscal deficit fell to 2.1% of GDP, below the government’s target of 3%. The IMF expects economic growth to remain resilient in 2026, forecasting GDP growth of 6.8%. Continued reforms and investment are expected to support activity. Remittances and elevated gold prices should also help sustain growth. The Fund projects growth will moderate to around 6% in 2027 as domestic demand gradually slows. Despite the positive outlook, risks have increased because of the conflict in the Middle East and its potential impact on the global economy. Uzbekistan has limited direct trade and remittance links with countries affected by the conflict. However, higher oil prices and trade disruptions could affect the country indirectly through key trading partners. Weaker global growth could add further pressure. The IMF warned that inflation is likely to remain above the Central Bank’s 5% target in 2026. Higher global oil prices, combined with strong domestic demand, could slow disinflation. The Fund recommended that the Central Bank keep its policy rate at a restrictive level and tighten monetary policy further if inflationary pressures persist. The Fund advised the government to avoid spending increases beyond those already planned in the budget. Any support measures linked to the Middle East conflict should be temporary and targeted toward vulnerable groups, rather than broad subsidies or price controls. The IMF called for faster privatization of state-owned commercial banks and enterprises. It also recommended stronger corporate governance and continued work to improve fiscal transparency and debt management. The Fund highlighted labor market challenges, including low female labor force participation and skills mismatches. High levels of informal employment remain another concern. Further progress in governance reform and competition policy could help attract additional private investment. The IMF said Uzbekistan’s commitments linked to accession to the World Trade Organization could also support long-term economic growth. The country enters 2026 from a position of economic strength, but maintaining stability and continuing...

Chinese Investment

Chinese Investment in Uzbekistan Surpasses $8 Billion This Year

President Shavkat Mirziyoyev met with a delegation of leading Chinese companies and financial institutions on the sidelines of the Tashkent International Investment Forum. The meeting focused on new investment projects in energy, mining, infrastructure, and finance. The Chinese delegation was led by Wang Hongzhi, head of China’s National Energy Administration. It included executives from China Energy Engineering Corporation, China Datang, Sinoma Energy Conservation, China Southern Power Grid, China CAMC Engineering, China National Nuclear Corporation, and State Nuclear Uranium Resource Development. Representatives of the Export-Import Bank of China and Bank of China also attended. According to Uzbekistan’s presidential press service, the talks focused on high-tech projects in the energy and geological sectors, as well as cooperation in banking and finance. Mirziyoyev welcomed the rapid growth of Uzbekistan-China economic ties. Since the beginning of the year, bilateral trade has exceeded $6 billion, while direct Chinese investment in Uzbekistan has surpassed $8 billion. Nearly 6,000 joint ventures involving Chinese partners are operating in the country. Renewable energy projects formed a major part of the discussion. Chinese companies are already involved in building solar and wind power plants, as well as energy storage systems, across Uzbekistan. Participants supported plans to accelerate ongoing projects and launch new initiatives. These include expanding photovoltaic power generation capacity, introducing agrivoltaic technologies that combine agriculture and solar energy production, and building new transmission lines. The meeting also covered cooperation in waste-to-energy generation and advanced technological solutions, including modern data centers. In mining and geology, officials discussed joint exploration and development of mineral deposits. They also reviewed long-term partnerships in the supply of critical raw materials. Financial cooperation was another key topic. Participants reviewed opportunities for Chinese banks to support infrastructure projects, irrigation modernization, high-speed road construction, hydropower development, agricultural machinery supplies, and financing for small and medium-sized businesses. Earlier this year, the third Uzbekistan-China Interregional Forum in Xi’an resulted in more than $3.5 billion in investment and export agreements, including $3.35 billion in investment projects and $156 million in export contracts. Officials said the agreements would support infrastructure modernization, transport development, environmental services, and industrial production. Speakers at the Xi’an forum said bilateral trade reached nearly $18 billion last year, while accumulated Chinese investment in Uzbekistan totaled $17 billion.

Nuclear Power

Central Asia’s Nuclear Push: Uzbekistan Starts Construction as Kazakhstan Plans at Least Three Plants

Uzbekistan has poured concrete for its first nuclear power plant, while Kazakhstan has signed a $16.5 billion agreement for a two-reactor facility near Lake Balkhash and approved a site for a second plant. Kazakhstan's long-term strategy calls for at least three nuclear power plants by 2050, with a fourth possible. Both governments are presenting nuclear power as a way to meet rapidly growing electricity demand and strengthen energy security. Yet the projects are advancing at different speeds and are reviving questions over water use, cross-border safety, financing, and long-term reliance on Russian technology and credit. Uzbekistan Moves Into Construction On June 4, 2026, Uzbek President Shavkat Mirziyoyev and Russian President Vladimir Putin launched construction by video link. Rafael Mariano Grossi, director general of the International Atomic Energy Agency, also took part. The first nuclear-grade concrete was poured overnight from June 4 to June 5 for the foundation slab of the first RITM-200N small modular reactor unit in the Forish district of the Jizzakh region. Uzatom subsequently classified the site as a nuclear power plant under construction. The facility is one plant with four planned reactor units: two large VVER-1000 units and two smaller RITM-200N units, each rated at 55 MW. Together, they would provide more than 2.1 GW of installed capacity. The present configuration is the latest version of a project that began with a 2017 peaceful-use agreement and a 2018 plan for two large reactors. In 2024, the focus shifted to six small reactors, before the design changed again in 2025 to the mixed large-and-small format now under construction. Uzbek and Russian projections put annual generation at about 17 billion kWh, or roughly 15% of future national demand. The current schedule envisages the first small unit reaching criticality in late 2029, with the large reactors expected to be commissioned in 2033 and 2035, although Uzatom has said final dates depend on outstanding contract arrangements. The project's stated base price is $9.5 billion, and Tashkent is seeking loans for most of the cost. Those financing terms, along with the final allocation of construction and operating risk, remain central to the project's viability. Water and Cross-Border Concerns The plant will stand near Lake Tuzkon in the Aydar-Arnasay lake system, about 40 kilometers from Kazakhstan's border. That proximity has made what is formally an Uzbek project a regional issue. Residents and environmental advocates in southern Kazakhstan have raised concerns about accident preparedness, radioactive waste, and possible pressure on already stressed water systems. Aiman Tleulesova, national coordinator of the Central Asian Regional Water Network, has argued that reactor cooling could require greater discharges into Lake Tuzkon and additional withdrawals linked to the Syr Darya system. In her assessment, that could intensify competition for irrigation water in Kazakhstan's Turkestan and Kyzylorda regions. These are concerns raised by specialists and campaigners, rather than established measurements of the completed plant's impact, but they require a quantified response because water scarcity is already a recurring regional problem. Uzbekistan held public hearings on the environmental impact assessment in...

New Development Bank

Uzbekistan and BRICS New Development Bank Agree on $4.5 Billion Joint Project Portfolio

Uzbekistan’s President Shavkat Mirziyoyev has held talks with Dilma Rousseff, president of the New Development Bank (NDB), who arrived in Tashkent to take part in the Tashkent International Investment Forum. According to Uzbekistan’s presidential press service, Mirziyoyev and Rousseff discussed prospects for expanding cooperation with the NDB, including the implementation of agreements reached during previous negotiations. Rousseff praised Uzbekistan’s economic reforms and said the bank was ready to support the country’s priority socioeconomic development goals. The meeting also covered Uzbekistan’s recent accession to the NDB. Uzbekistan officially became the bank’s 10th shareholder in June 2026 and the first Central Asian country to join the institution. Mirziyoyev and Rousseff agreed to form a medium-term portfolio of joint projects in energy, water management, transport and engineering infrastructure, and support for the private and social sectors. NDB expert missions will help implement the initiatives. In May, Uzbekistan’s Ministry of Investment, Industry and Trade said a project portfolio worth $4.5 billion had been prepared for financing through the NDB. It includes projects in transport, energy, construction, and industry. In particular, the possibility of attracting funds for the construction of a nuclear power plant is under consideration. The meeting also covered the NDB’s participation in major regional transport and logistics projects, as well as Uzbekistan’s environmental transformation programs. The NDB was created by BRICS countries in 2014. It is one of the main financial institutions of the Global South. The bank holds an AA+ credit rating and is developing alternative financial mechanisms, including settlements in national currencies. According to the presidential press service, Uzbekistan’s accession to the NDB will help diversify sources of external financing and attract concessional investment for economic modernization.

Tashkent International Investment Forum

Digital Diplomacy and Soft Power at TIIF 2026

At the Tashkent International Investment Forum 2026, a panel on “Digital Diplomacy and Soft Power” examined how governments use online platforms, artificial intelligence and direct public communication to shape their international reputation and attract investment. Vladimir Norov, Uzbekistan’s former foreign minister, former secretary-general of the Shanghai Cooperation Organization and current chairman of the Central Asian Association for Artificial Intelligence, said diplomacy had changed sharply since he entered the profession in the 1990s. Governments that once had time to verify information and prepare formal responses now face pressure to communicate within minutes. “When I was appointed ambassador to Germany in 1998, we had no website,” Norov recalled. “We prepared one ourselves. At that time, communication was very different.” According to Norov, diplomacy has shifted to a model of permanent connectivity. Information spreads globally within minutes, often before governments have had time to verify facts or coordinate responses. For Norov, the today's challenge is "balancing speed with wisdom ... We must communicate promptly while ensuring accuracy and preserving dialogue." At the same time, he warned that governments also face serious challenges such misinformation campaigns, cyber threats, and the growing influence of large technology companies in shaping public narratives. Norov recalled that in previous years many government institutions were reluctant to communicate publicly. When he became director of Uzbekistan’s Institute for Strategic and Regional Studies in 2018, he discovered that the institution lacked a website and social media presence. “It was a challenge to convince people,” he said. “Many believed the information should remain internal.” [caption id="attachment_50731" align="aligncenter" width="1024"] Image: TCA[/caption] The discussion at TIIF extended beyond diplomacy to the broader question of how countries communicate economic reforms and investment opportunities. Abdulla Abdukadirov, acting director of the Agency for Strategic Development and Reforms, argued that one of the biggest challenges in attracting investment is the gap between ambitious promises and practical implementation. “Every investor’s main motivation is to make money, but the expectations of the hosting country are more to bring value,” he said. According to Abdukadirov, governments must avoid creating unrealistic expectations and should focus on commitments within their operational control. He stressed a shift in how Uzbekistan presents itself internationally. “We are not considering Uzbekistan as one unique country, but as a whole region, Central Asia,” he said. [caption id="attachment_50733" align="aligncenter" width="1024"] Image: TCA[/caption] The role of communication in shaping investor perceptions was also highlighted by Oybek Shaykhov, founder of EUROUZ and East-West Group. Drawing on his experience working with European businesses, Shaykhov argued that communication quality remains a critical factor in attracting long-term investment. He suggested that governments must respond more proactively to investor inquiries. “When a decision is taken, we have to give some reason why exactly this decision is taken,” Shaykhov said. Leandro Slovinski, editor-in-chief of The Investor, compared national investment promotion to the customer-service strategies used by luxury brands. According to Slovinski, governments should focus on highly targeted engagement with specific investors. “We should stop addressing foreign investors as a whole,” Slovinski said, stressing that investors often...

Transport Corridors

EDB Says Uzbekistan Is Becoming a Eurasian Transport Hub

Uzbekistan is becoming a crossroads of Eurasian transport corridors, Alexei Skatin, deputy chairman of the Management Board of the Eurasian Development Bank (EDB), said at the Tashkent International Investment Forum on June 18. Skatin made the remarks during a panel session titled Transforming the Railway Sector and Developing New Logistics Corridors in Central Asia: Investment Opportunities and Regional Connectivity. According to Skatin, three key railway corridors will pass through the country: the China-Kyrgyzstan-Uzbekistan railway, which is already under construction; the Trans-Afghan railway; and the planned Tashkent-Samarkand high-speed rail line. The China-Kyrgyzstan-Uzbekistan corridor is expected to provide a direct container link between Uzbekistan and China, with further connections to Turkmenistan, the South Caucasus, Turkey, and the Gulf states. According to EDB estimates, the corridor could increase container traffic through Uzbekistan fivefold, from 100,000 to 500,000 TEU. The Trans-Afghan railway corridor is expected to provide direct access to Pakistani ports, reducing the distance for Uzbek cargo shipments by at least 1,000 kilometers. The Tashkent-Samarkand high-speed rail line, described by the EDB as the first dedicated high-speed rail project in Central Asia, is expected to free up the existing line for freight and container traffic. The completion of the Darbaza-Maktaaral railway in Kazakhstan and the creation of a new border crossing are expected to integrate Uzbekistan into the Trans-Caspian International Transport Route, also known as the Middle Corridor. “Uzbekistan is transforming from a landlocked country into a crossroads of East-West and North-South routes. It is the combination of these routes that makes it a point of intersection, not just a transit point,” Skatin said. He added that transport corridor development is impossible without the simultaneous expansion of warehousing infrastructure, dry ports, and container terminals. According to EDB estimates, demand for warehousing in Uzbekistan could grow more than sevenfold, while current availability remains low. “A transport corridor only works when goods move along it. That is why we consider warehouses, dry ports, and terminals together with transport routes, not separately. Warehouses are not an add-on to corridors; they are a condition for corridors to generate revenue,” Skatin said. The EDB says it is the leading multilateral development bank in non-sovereign financing in Central Asia. The bank sees its role as unlocking the investment potential of transport corridors and related infrastructure, including warehouses, dry ports, and terminals in Uzbekistan. According to EDB estimates, freight traffic in Central Asia will grow by 50% by 2030, reaching 95 million metric tons compared with 2024, while container traffic is expected to grow by 67% to 1.7 million TEU.