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Economy

Uzbekistan’s Foreign Debt Climbs to $64.1 Billion in 2024

Uzbekistan’s total external debt rose to $64.1 billion in 2024, accounting for 55.7% of the country’s gross domestic product (GDP), according to a new report from the Central Bank on the balance of payments, international investment position, and external debt. This marks an increase from 51.9% at the end of 2023. The country’s external debt includes both public and private liabilities, though many private-sector entities, particularly in banking and industry, are partially or wholly state-owned. The government controls approximately 65% of the banking sector and holds stakes in major enterprises such as UzAuto Motors and Uzbekneftegaz. These companies, along with state-owned banks like the National Bank of Uzbekistan (NBU) and Uzpromstroybank, have collectively issued billions in debt over recent years. Corporate (or private sector) external debt rose by $6.6 billion to $30.2 billion, equivalent to 26.2% of GDP. Government debt increased by $4.2 billion, reaching $33.9 billion, or 29.5% of GDP. Since 2016, Uzbekistan’s external debt has expanded 4.4 times, from $14.7 billion to $64.1 billion. Corporate debt has nearly quadrupled during that period, while government debt has grown by a factor of 5.2. Although the growth rate of public external debt has decelerated in recent years, corporate debt, primarily borrowed by state-owned banks and companies, continues to rise sharply. According to projections from the Ministry of Economy and Finance, Uzbekistan’s public debt is expected to reach $45.1 billion by the end of 2025, representing 36.7% of projected GDP. By the end of 2024, public debt is estimated to total $39.7 billion.

Economy

Kazakhstan Aims to Nearly Triple Investment in the Economy by 2029

Kazakhstan plans to significantly increase investment in its economy over the next five years, aiming to nearly triple current levels. However, officials from the Ministry of National Economy acknowledge that the primary challenge lies not in securing additional funds but in the shortage of high-quality investment projects. Shortage of Viable Projects At a recent meeting of the Expert Council under the Ministry of National Economy, Deputy Minister Arman Kasenov stated that the ratio of domestic investment to GDP currently stands at a modest 14-15%, a figure he described as objectively low. “To achieve higher rates of economic growth, investments need to increase 2.75 times, from $40 billion in 2024 to $103 billion by 2029,” Kasenov stated. To help reach this target, the government plans to allocate KZT 1 trillion (approximately $2 billion) through the state holding company Baiterek to stimulate business lending. This amount is expected to catalyze additional credit lines totaling KZT 8 trillion (around $15.9 billion). Still, Kasenov stressed that financing alone is not enough. “The real issue is the lack of quality projects,” Kasenov said. “This problem has been flagged by international development finance institutions. When we talk about increasing investment from $40 billion to $103 billion, it’s not just about capital, it's about where and how that capital is deployed.” Targeting High-Return Sectors To ensure impactful investment, the Kazakh government is prioritizing support for highly productive and export-oriented projects. These are concentrated in key sectors such as metallurgy, oil and gas, petrochemicals, and agriculture. Rustam Karagoyshin, the head of Baiterek Holding, outlined the financing model for investment projects, which consists of 60% market funding and 40% state-backed lending. In 2025, Baiterek plans to disburse a total of KZT 8 trillion in project financing, with KZT 3.75 trillion (around $7.4 billion) provided in the national currency. “Our main objective is to unify lending rates at 12.6% for end consumers. Standardizing rates will enable second-tier banks to participate across nearly all sectors where Baiterek operates today,” Karagoyshin said. Foreign Investment Outlook As The Times of Central Asia previously reported, Kazakhstan is looking to attract more foreign direct investment following a notable decline in 2023. Amid growing concerns about resource nationalism, the government is eager to position itself as a stable and attractive destination for international capital.

Economy

Kyrgyzstan Begins Domestic Printing of National Currency Banknotes

For the first time since gaining independence, Kyrgyzstan has begun printing its national currency, the som, within the country. Previously, Kyrgyz banknotes were produced in various European countries. The new notes are produced by the Bishkek-based Open Joint Stock Company Uchkun. Starting with Small Denominations Chairman of the National Bank Melis Turgunbayev announced that production has begun with small-denomination bills. This approach will enable a quicker replacement of worn or damaged notes scheduled for withdrawal from circulation. Turgunbayev stressed that the new banknotes adhere to the highest international standards for counterfeit protection. A Modernized National Printing Facility Uchkun has recently undergone a major modernization effort, acquiring state-of-the-art printing equipment. In addition to currency, the facility now produces passports, excise stamps, and educational materials. According to Uchkun's Director Bakytbek Sultanov, the enterprise has already begun printing passports and excise stamps. He stated that in his opinion the security features of Kyrgyz passports rank among the top ten globally for protection against counterfeiting. In 2024 alone, Uchkun produced over 770,000 passports and nearly one million books, marking a significant step forward in Kyrgyzstan’s self-reliance in secure printing technologies.

Economy

Kyrgyzstan’s Economic Boom or Bust? Calls for Inclusive Growth Persist

Kyrgyz President Sadyr Japarov declared late last year that the country’s economic growth had reached historic milestones, with GDP maintaining positive momentum. However, local economists remain skeptical about the broader impact of this growth. In 2020, Kyrgyzstan’s GDP stood at 639 billion KGS ($7.3 billion), according to official data. By the end of 2025, this figure is projected to reach 1.8 trillion KGS ($22 billion). Growth Without Inclusion In an interview with The Times of Central Asia, economist Nurgul Akimova acknowledged that the reported 9% GDP growth and the so-called “leopard’s leap” frequently mentioned by the government are positive developments. However, she stressed that for economic expansion to be meaningful for ordinary citizens, it must be inclusive. "Nine percent growth is not inclusive because it does not create additional jobs. The main drivers of our economic growth are construction, downstream industries, and the financial sector. These sectors do not contribute to improving human capital. In construction, for instance, a significant portion of costs goes toward imported building materials," Akimova explained. According to Akimova, Kyrgyzstan’s economy has followed an inertia-driven trajectory for the past 30 years, avoiding major shocks but also failing to achieve significant breakthroughs. She pointed out that if the garment sector were growing, it would have a greater impact, as it did 15 years ago when Kyrgyz-made clothing was exported to neighboring countries. "For example, a seamstress spends her income on education, healthcare, and consumption. By doing so, she contributes to the development of other inclusive sectors, benefiting society as a whole," Akimova said, adding that while the economy is expanding, it is not improving the welfare of citizens. A People-Centered Economy Akimova emphasized that economic policy should prioritize people’s wellbeing, as failure to do so could erode public trust in the government. She also criticized official comparisons of Kyrgyzstan’s economic growth with other countries, arguing that such assessments lack context. "Officials claim Kyrgyzstan is growing faster than others, but an economy that produces microchips and one that manufactures T-shirts are fundamentally different. These industries require distinct investment levels, equipment, and human capital." Kyrgyzstan’s economy is currently valued at approximately $14 billion. If the country were to sustain an annual 10% growth rate, as authorities suggest, GDP would increase by $1.4 billion per year. Akimova highlighted that this figure represents only 0.5% of Kazakhstan’s economic growth, 0.06% of Russia’s, and a mere 0.0006% of the United States’ GDP expansion. "When we hear claims that we are growing faster than others, we must consider the scale and complexity of economic processes," the economist concluded.

Ramadan

Fast Now, Feast Later: The Culinary Traditions of Ramadan in Uzbekistan

You hear the darkness before you see it. As the late winter sky pales over Tashkent, the noise of thousands of motorbike engines, bicycle bells, and apartment buzzers mounts to a crescendo. Those who haven’t ordered in battle their way past the onrushing delivery drivers towards the nearest restaurant. At Xadra, in the city’s Chilonzor district, tables fill rapidly. Dates, walnuts, sweetened milk, and bottles of water await their parched and starved customers. Many eye their watches carefully, waiting for the moment, at precisely 18.17, when they can begin to eat. Ramadan, or ramazon in Uzbek, is the ninth month of the Islamic calendar. From dawn until sunset, Muslims must refrain from eating, drinking, and other physical needs, only breaking their fast at sundown with a meal known as iftar. Though one might imagine a month of fasting would see a lull in activity across Tashkent’s catering sector, on the contrary, Ramadan is a month that is very much about food. [caption id="attachment_29505" align="aligncenter" width="1600"] Dates and milk are a traditional fast-breaking snack for starved stomachs; image: Joe Luc Barnes[/caption] The not-so-strict fast While the vast majority of the population are Muslim, Uzbekistan is a secular country, and there are no laws requiring restaurants or bars to close during daylight hours. Nevertheless, “cafes and restaurants are definitely less crowded; they’re at no more than 30 or 40% capacity during the daytime,” said Saodat Umarova, an economic analyst at the Center for Progressive Reforms. Shavkat, a kebab shop owner, observes a sharp decline in daytime custom. “I’m still open, but it’s certainly a more relaxed pace,” he said, pausing the film on his phone to talk to TCA. While a nearby university provides some business, his regular clients remain committed to their fasts. When asked if he finds it difficult being around food when he himself is fasting, Shavkat says that he does not mind. “On the first day or two, it is difficult, but you get used to it. This year is not such a difficult year.” He is referring to the season: in 2025, Ramadan began on March 1 and will end on March 30; the fasting period is a little over 12 hours, and the weather is mild. “When Ramadan falls in summer, you have long days, and it’s forty-degrees [104F], that’s when you really get tested.” Corporate accommodation The rhythm of business operations also shifts during the holy month. Oybek Shaykhov, Secretary General of the Uzbekistan-European Association for Economic Cooperation, tells TCA that while the economy doesn’t typically slow down, the nature of business meetings changes. “Breakfasts, lunches, and dinners are central to the business community, and during Ramadan, these gatherings shift towards Iftar, which is more of a group engagement rather than bilateral discussions,” he said. “Many companies try to ease workloads for employees, particularly if Ramadan falls during the hotter months, to accommodate fasting” Gulmira, a lawyer at a construction company, echoes this sentiment. “The only real difference is the lunch hour; everyone who is...

U.S. Sanctions

Kazakh Machine Builders Face Payment Hurdles in Russia Trade

Azat Peruashev, head of the Ak Zhol party's parliamentary faction, which represents Kazakhstani business interests, has appealed to Prime Minister Olzhas Bektenov and National Bank Chairman Timur Suleimenov to address payment difficulties faced by machine-building enterprises exporting to Russia. According to the Majilis deputy, these challenges stem from within Kazakhstan itself. Peruashev explained that machine-building enterprises have approached his party, reporting that Kazakhstani banks are refusing them credit. Additionally, second-tier banks (BVUs) are declining to process payments for companies engaged in business with Russian partners. “These actions by financial institutions are driven by concerns that exported products could be added to U.S. and EU sanctions lists, which, in turn, could expose the banks to secondary sanctions,” Peruashev said. As a result, commercial banks in Kazakhstan have begun demanding that local factories provide guarantees that they will not export products to Russia - under threat of having their credit lines revoked. This is happening despite assurances from David O'Sullivan, the European Union’s sanctions envoy, who recently visited Kazakhstan. O'Sullivan stated that the European Commission would not impose sanctions on goods manufactured in Kazakhstan and exported to Russia. “The EU’s only concern is to prevent the re-export of sanctioned European products through Kazakhstan,” Peruashev said. “However, representatives of Kazakhstan’s largest banks find these assurances unconvincing. In their view, the decisive factor is not whether a product is re-exported or locally manufactured, but whether it appears on a sanctions list. This creates the risk of secondary sanctions, not necessarily from the EU, but from the U.S., including the potential disconnection from the SWIFT international banking system.” According to Ak Zhol, Kazakhstani exports of machine-building products and components to Russia fell by 15% last year. The banks’ refusal to process payments is not based on any official government restrictions. Last summer, seven Kazakh companies faced U.S. secondary sanctions for cooperating with Russian partners. In October, the list expanded to include Kazstanex, a company involved in supplying machine tools and components. As The Times of Central Asia previously reported, during his visit to Astana in January, David O'Sullivan stated that the EU had sanctioned two Kazakh companies so far but did not rule out further additions to the list.