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Moody's Ratings

Moody’s Assigns Kyrgyzstan First-Ever Positive Outlook

For the first time, international credit rating agency Moody’s has assigned Kyrgyzstan a positive outlook, while reaffirming the country’s sovereign credit rating at B3. According to the Ministry of Finance, the shift reflects Kyrgyzstan’s stable economic growth. Finance Minister Almaz Baketaev met with Moody’s Managing Director David Aldrich on the eve of the announcement. Discussions covered areas of future cooperation, Kyrgyzstan’s investment profile, strategies for attracting external financing, and the country's credit trajectory. “Moody’s has revised its outlook on the Kyrgyz Republic’s sovereign credit rating from stable to positive, confirming the long-term rating at B3. The economy is demonstrating steady growth: real GDP for January to July 2025 rose by 11.5%,” the Ministry of Finance stated. “In May 2025, Kyrgyzstan successfully issued its first Eurobonds, raising $700 million. Investor demand exceeded supply threefold, with a five-year maturity and a 7.75% coupon rate.” The ministry noted that all proceeds from the Eurobond issuance have been placed in a dedicated account to manage public debt responsibly. Kyrgyzstan’s B3 rating has remained unchanged in recent years. While Moody’s upgraded the country’s outlook from negative to stable in 2024, this year marks the first time the outlook has been revised to positive. The Ministry of Economy described the revised outlook as recognition of the government’s efforts to stabilize and grow the economy. “The updated forecast reflects improvements in Kyrgyzstan’s macroeconomic and fiscal indicators, as well as stronger long-term development potential,” the ministry noted. “These results stem from key reforms, economic diversification, and sustained infrastructure investment.” According to official figures, all sectors of the economy posted growth in the first half of 2025. Construction recorded the highest increase at 45% since the start of the year, while agriculture saw the most modest growth at 3.8%. Total GDP for the first six months of the year amounted to 711 billion soms.

Rogun Dam

Tajikistan’s Rogun Dam Delayed as World Bank Freezes Funding

The future of Tajikistan’s flagship infrastructure project, the Rogun Hydropower Plant, has been thrown into doubt as the World Bank and other development partners delay financing until the government fulfils key conditions, Nezavisimaya Gazeta reported. The move reflects growing concerns among environmental groups and downstream communities in Uzbekistan and Turkmenistan over the dam’s ecological risks to the Amu Darya River. A Strategic Asset With Mounting Costs The Rogun project, often hailed as Tajikistan’s greatest national undertaking, is central to the government’s ambitions for energy independence and regional electricity exports. But it also represents one of the country's most significant financial liabilities. Standard & Poor’s Global Ratings recently affirmed Tajikistan’s sovereign credit rating at “B/B” with a stable outlook, but cautioned that Rogun is so costly it may never generate sufficient returns. The agency warned that the project could push the national budget into deficit by the end of 2025. Construction of the dam began in 1976 under the Soviet Union but was suspended during Tajikistan’s civil war. Attempts to restart the project in the early 2000s stalled over disagreements with Russian partners. In 2016, the government relaunched the project with support from the World Bank, awarding the main construction contract to Italy’s Salini Impregilo (now Webuild). That same year, the Vakhsh River was diverted and dam construction resumed. Two turbines were commissioned in 2018 and 2019, but significant progress has since slowed. To complete the plant, Tajikistan must install six additional turbines, raise the dam from its current 135 meters to the planned 335 meters, and secure an estimated $6.4 billion in new funding, roughly 40% of the country’s projected GDP for 2025. Conditions for Continued Support The World Bank has suspended further financing until Tajikistan presents a credible financing strategy that avoids unsustainable public debt, finalizes long-term electricity export agreements, and implements robust dam safety protocols. Without these conditions in place, the Bank has stated it cannot continue its support. Environmental opposition to the project has also intensified. The international coalition Rivers without Boundaries has warned that filling the Rogun reservoir could reduce Amu Darya river flows by more than 25%, accelerating desertification and endangering the livelihoods of up to 10 million people in Uzbekistan and Turkmenistan. Alexander Kolotov, a representative of the coalition, told Nezavisimaya Gazeta that the World Bank’s board is expected to review a report based on complaints filed by downstream communities, though no specific date has been set. Kolotov emphasized that Rogun poses one of the largest economic risks to Tajikistan and questioned whether international lenders should deepen their involvement. Broader Economic Fragility Tajikistan faces additional vulnerabilities. The country remains heavily reliant on remittances from labor migrants in Russia, lacks economic diversification, and is projected to lose its “least developed country” status in 2026, potentially curtailing its access to concessional aid and financing. For now, the Rogun Hydropower Plant stands as both a symbol of national aspiration and a looming financial gamble. Whether it becomes a cornerstone of regional energy security or a cautionary tale...

Credit rating

S&P Reaffirms Tajikistan’s Credit Rating at B/B with Stable Outlook

International ratings agency S&P Global Ratings has reaffirmed Tajikistan’s sovereign credit rating at B/B with a “stable” outlook, according to a statement from the National Bank of Tajikistan. The bank noted that Tajikistan has worked with international rating agencies since 2014 to assess its sovereign creditworthiness. The reaffirmed rating reflects improved engagement with international partners, consistent economic growth, and rising foreign exchange reserves, all of which contribute to timely debt servicing and reduced pressure on the country’s balance of payments. Officials emphasized that Tajikistan’s external economic indicators have strengthened in recent years, even as concessional loans continue to make up a large share of its public debt. Maintaining the current rating, they said, affirms the country’s macroeconomic stability and strong economic performance, while enhancing its credibility with foreign investors. In July, the Eurasian Development Bank (EDB) forecast that Tajikistan’s economy would grow by 8.4% in 2025, the country’s fastest expansion in two decades. Growth of 8% is projected for 2026 and 7.1% for 2027, with Tajikistan expected to outpace both regional and global averages despite a slight moderation. A key factor underpinning this momentum is remittances from Tajik migrant workers, which are said to account for approximately 45% of GDP. These funds remain vital to the economy, sustaining household consumption and contributing to overall macroeconomic resilience.

Economy

Kyrgyzstan Seeks Credit Rating Upgrade from Moody’s

Kyrgyzstan is aiming to secure an upgrade to its sovereign credit rating following a visit by a delegation from international ratings agency Moody’s, and meetings with top government officials, including Minister of Economy and Commerce Bakyt Sydykov. During the discussions, Sydykov presented Moody’s analysts with an overview of Kyrgyzstan’s socio-economic performance, ongoing structural reforms, and fiscal priorities. He formally requested that Moody’s consider raising the country’s credit rating. “The Kyrgyz Cabinet is consistently implementing policies aimed at maintaining macroeconomic stability, fostering a competitive environment, and enhancing social protections for our citizens,” Sydykov stated. He noted that these measures are improving the investment climate and strengthening the country's financial position. Moody’s delegation also held separate consultations with representatives from the Ministry of Finance, the National Bank, and other key state institutions. The agency’s analysts focused on Kyrgyzstan’s fiscal policy, public debt sustainability, long-term economic growth prospects, and its investment climate. Government officials said that comprehensive data on macroeconomic indicators and policy initiatives were shared during what they described as a “constructive” dialogue. The consultations are seen as an important step in Kyrgyzstan’s engagement with international financial institutions. Moody’s currently assigns Kyrgyzstan a long-term sovereign credit rating of B3 with a stable outlook. This rating places the country in the speculative category, implying elevated credit risk, but with no immediate threat of default. In 2023, Moody’s revised Kyrgyzstan’s outlook from “negative” to “stable.” The agency at the time cited concerns over the nationalization of the Kumtor gold mine and the potential impact of Western sanctions on Russia, Kyrgyzstan’s primary trading partner. However, the feared capital flight and deterioration in economic indicators did not materialize. Despite this, Moody’s has continued to flag key vulnerabilities, including high levels of state intervention in the economy, lingering risks linked to domestic political instability, and the unpredictability of some government decisions. The next sovereign rating update from Moody’s is expected later this year.

Credit rating

Moody’s Upgrades Outlook on Uzbekistan’s Credit Rating to Positive

Moody’s Ratings has revised Uzbekistan’s credit outlook from stable to positive, while affirming its long-term issuer rating at Ba3, a level that denotes speculative or non-investment grade status. The improved outlook reflects increased confidence in the country’s ongoing structural reforms and governance improvements. According to Moody’s, Uzbekistan’s efforts to strengthen public sector governance and liberalize key sectors such as energy could enhance policy effectiveness and lay the foundation for sustainable economic growth. Recent steps include restructuring the supervisory boards of all state-owned enterprises (SOEs) and banks, with an increased presence of independent members. The government is also advancing legislation on conflict of interest, asset declaration, and whistleblower protections, measures that signal a broader commitment to transparency. The energy sector reforms highlight the government's readiness to undertake challenging but necessary changes. Tariffs have risen sharply as part of a phased plan to achieve full cost recovery by 2027-2028. While inflationary pressures persist, the government has sought to mitigate their impact through targeted increases in public sector wages and pensions and by scaling back subsidies. Privatization remains central to Uzbekistan’s reform strategy. The government plans to reduce the state’s share in the banking sector from 65% to 46%, following the successful privatization of Ipoteka Bank. The recently established National Investment Fund, managed by Franklin Templeton, will oversee holdings in 18 major enterprises. Initial public offerings are planned for several large firms, including Navoi, Uzbekistan’s largest taxpayer. Moody’s forecasts GDP growth of 5.8% in 2025 and 5.7% in 2026, supported by increased investment in energy and transport infrastructure under the Uzbekistan 2030 Strategy and rising levels of foreign direct investment. The fiscal deficit declined to 3.3% of GDP in 2024 and is projected to remain below 3% in the coming years. Although Uzbekistan’s public debt remains moderate, liabilities linked to SOE borrowing and public-private partnership (PPP) projects are increasing. To manage these risks, the government has imposed caps on new PPPs and now requires official approval for external borrowing by state-owned entities. Moody’s also pointed to persistent institutional weaknesses, low per capita income, and governance concerns, as well as regional geopolitical risks. However, the agency noted that if current reform momentum continues and economic indicators improve further, an upgrade to the country’s credit rating is possible. Uzbekistan’s credit profile is bolstered by its diversified economy, strong growth outlook, and prudent fiscal management. With continued reforms and growing investor confidence, the country appears increasingly well-positioned for long-term economic stability.