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External debt

Uzbekistan’s External Debt Reaches $43.97 Billion

Uzbekistan’s external debt reached 43.97 billion dollars as of October 1, according to data released by the Ministry of Economy and Finance. The increase of 473 million dollars over the previous quarter reflects a slowdown in borrowing, even as the government continues to rely on foreign funding to sustain public spending and major infrastructure projects. The country’s largest creditor remains the World Bank, which has extended 8 billion dollars in loans. This is followed by the Asian Development Bank with 7.5 billion dollars and international investors who hold 5.8 billion dollars in Eurobonds. Loans from Chinese financial institutions total 3.7 billion dollars, while Japanese lenders account for 3.1 billion dollars. Additional borrowing includes 1.7 billion dollars from the Asian Infrastructure Investment Bank and 1.2 billion dollars from France. Multilateral lenders such as the Islamic Development Bank also contribute to the total, along with a group of smaller international creditors that collectively account for 2.5 billion dollars. Debt denominated in U.S. dollars comprises 63% of Uzbekistan’s total external debt, while 12% is in Uzbek som, 8% in euros, and 6% in Japanese yen. The remainder is held in Special Drawing Rights and other currencies. In a related development, RIA Novosti, citing World Bank figures, reported that Uzbekistan increased its debt to Russia by 39 million dollars in 2024. This small rise came amid a broader trend across 38 countries whose combined debt to Russia grew to 33.1 billion dollars last year, the highest level since 1998.

Rogun Dam

Environmental Groups Criticize World Bank’s Decision on Rogun Dam Complaint

Environmental advocates have sharply criticized the World Bank’s decision to reject a request for a full investigation into Tajikistan’s Rogun Hydropower Plant, citing concerns over potentially severe environmental and social consequences for communities downstream along the Amu Darya river in Uzbekistan and Turkmenistan. According to the international coalition Rivers without Boundaries, the World Bank’s Board of Executive Directors dismissed the complaint despite mounting evidence that the project could exacerbate water scarcity, degrade water quality, damage vulnerable ecosystems, and displace rural populations dependent on agriculture and access to clean water. The complaint, filed earlier this year on behalf of affected communities, argued that the project’s environmental impact assessments were based on outdated data and non-binding verbal assurances from Tajikistan that the reservoir would not be operated at full capacity. The World Bank’s Inspection Panel registered the complaint in April 2025 and, after conducting an initial review, including a fact-finding visit to Tajikistan in June, recommended a comprehensive investigation, citing a strong likelihood of harm. However, the Bank’s Board rejected that recommendation, asserting that only citizens of the country receiving Bank financing are eligible to request an investigation. This decision surprised observers, particularly given that the Bank had previously accepted similar complaints from Uzbekistan over the same project in 2010. Environmental groups argue that the Board’s procedural reasoning allows it to ignore the project's far-reaching transboundary impacts. Evgeny Simonov, a lead expert at Rivers without Boundaries, stated that the Inspection Panel’s own findings validated the downstream communities’ concerns. He accused the Bank of avoiding accountability by hiding behind technicalities. Alexander Kolotov, director of the same coalition, said the ruling reveals a contradiction between the Bank’s public commitments to inclusive development and its actual response to cross-border grievances. He warned that dismissing downstream voices undermines the principles of equitable and participatory water governance. Environmental experts also caution that the refusal to launch an investigation leaves no recourse for affected communities should their fears materialize. Potential long-term impacts include increased soil salinity, reduced agricultural productivity, and the erosion of traditional rural livelihoods. The Rogun Alert coalition, an alliance of international environmental organizations, announced plans to continue monitoring the situation and to explore alternative mechanisms to protect the environmental rights of the region’s residents. Previous assessments had warned that filling the Rogun reservoir could reduce water flows to the Amu Darya delta by 25% or more, with potentially devastating effects on ecosystems and the wellbeing of up to 10 million people in Uzbekistan and Turkmenistan.

Reforestation

Natural Barriers: Kyrgyzstan Fights Disasters with Reforestation

Kyrgyzstan’s Ministry of Emergency Situations, in collaboration with representatives of the World Bank, has surveyed floodplain areas in the Jalal-Abad region to identify zones most vulnerable to erosion and flooding. The ministry's press service reported that environmental protection efforts will soon begin in these areas, aimed at strengthening soil stability and reducing the risk of natural disasters. The Forestry Institute had earlier designated the region as a pilot site for environmental initiatives. Emergency services personnel and forestry specialists plan to plant trees to establish protective forest belts. The trees’ root systems are expected to reinforce the soil and serve as natural barriers against landslides and mudflows. Last year, the region suffered severe rainfall, triggering mudslides that nearly destroyed two villages. A 10-year-old child lost their life, and over 300 families were evacuated. The disaster also inundated a section of the Bishkek-Osh highway, paralyzing traffic for several hours. “Visiting the ravines allowed us to assess their current condition and identify the areas most vulnerable to erosion. The timely implementation of protective measures, such as planting trees and applying bioengineering solutions, will not only mitigate flood risks but also help restore ecological balance,” the ministry stated. The project is funded by the World Bank and the International Development Association. The Jalal-Abad region has been selected for the pilot phase, with similar initiatives planned for other regions across the country. A recent World Bank report emphasized the economic costs of forest loss, noting its impact on the water cycle, soil stability, and drought resilience, factors that contribute to billions of dollars in global losses. “People and communities around the world are facing not only an environmental crisis but also an economic one. The good news is that solutions exist. If countries start investing now, natural systems can be restored, delivering strong returns in economic growth and job creation,” said Axel van Trotsenburg, Senior Managing Director at the World Bank. Experts argue that environmental programs should not be viewed as obstacles to development, but rather as key to building more sustainable and resilient economies.

Economic Reforms

World Bank Approves $800 Million Loan for Uzbekistan’s Economic Reforms

The World Bank has approved an $800 million concessional loan package to support Uzbekistan’s ongoing structural reforms, aimed at reducing poverty, creating jobs, and expanding private sector-led growth. The financing is designed to help the government enhance competition, strengthen social protections, and foster a more dynamic economic environment. The financial support will fund a broad set of policy initiatives, including mitigating the impact of energy tariff increases on low-income households, advancing gender equality in the workplace, and expanding access to social services for vulnerable populations. The package also targets reforms in key sectors such as telecommunications, agriculture, and energy, while supporting greater integration of Uzbekistan into global trade networks. With favorable long-term repayment terms, the loan will reduce the country’s debt servicing costs and free up government resources for economic and social development. One of the central measures backed by the package is a significant boost in financial assistance for low-income families. Annual cash transfers per household will increase from UZS 270,000 to UZS 1 million to offset the rising costs of electricity, heating, and gas. The World Bank package will also support legislation to protect women from sexual harassment and workplace discrimination, including safeguards against employment bias related to pregnancy or childcare responsibilities. Reforms will open the provision of social services to private and non-governmental organizations, enabling greater coverage and efficiency. Among other key initiatives is the establishment of a National Investment Fund to manage and privatize state-owned enterprises. The creation of an independent telecommunications regulator is expected to promote competition, while new agricultural risk insurance schemes and liberalized cotton pricing aim to strengthen resilience and market access for farmers. Textile companies will be permitted to buy cotton directly from producers at flexible prices. The reform agenda also focuses on trade liberalization, including the removal of exclusive rights in strategic sectors such as energy, oil and gas, and agriculture. Export procedures will be simplified, and new regulations will promote private participation in electricity distribution and allow renewable energy producers to sell directly to consumers. Energy efficiency and climate policy are integral to the package. Uzbekistan plans to establish a National Energy Efficiency Agency and introduce incentives for solar power, heat pumps, and energy-efficient building retrofits. Public procurement processes will incorporate environmental criteria to support sustainable products and services. According to a World Bank report released in July, Uzbekistan’s economy grew steadily between 2010 and 2022, with per capita GDP rising by an average of 4.2% a year, outpacing the regional average. However, the report noted that growth has relied heavily on capital investment rather than productivity gains, and that deeper reforms are needed to build a more competitive private sector.

Economic Growth

Uzbekistan Emerges as One of Europe and Central Asia’s Fastest-Growing Economies

Uzbekistan is on track to be one of the five fastest-growing economies in the broader Europe and Central Asia region next year, according to the World Bank’s Europe and Central Asia Economic Update, Fall 2025. The report projects Uzbekistan’s gross domestic product will expand by about 6.2% in 2025 - well above the regional average amid an overall slowdown across emerging European and Central Asian markets. Overall regional GDP growth is expected to ease to roughly 2.4% in 2025, down from 3.7% in 2024, as weaker output in Russia drags on the aggregate. Central Asia as a whole continues to stand out. The World Bank notes that countries in the region are collectively growing around 5.9% - making it the fastest-growing part of Europe and Central Asia for the third straight year. Within that group, Tajikistan is also forecast to grow by 7%, Kyrgyzstan by 6.8%, and Kazakhstan by 5.5%. That performance keeps much of Central Asia well ahead of Europe’s advanced economies, which are expected to grow by just over 1% on average. Turkmenistan is excluded from the World Bank’s regional calculations because it does not publish internationally comparable economic data. For Uzbekistan, in particular, inclusion among the region’s top performers marks a sharp turnaround for a country that, less than a decade ago, was largely closed to global markets. By way of comparison, according to the World Bank, Uzbekistan’s economy is about eight times larger than Kyrgyzstan’s and roughly seven times larger than Tajikistan’s. In 2024, Uzbekistan’s gross domestic product was roughly $105 billion, compared with approximately $14 billion for Kyrgyzstan and $15 billion for Tajikistan. Remittances and Investment Fuel Expansion Rising income from abroad and expanding investment at home due to an increasingly investor-friendly climate are the twin engines of Uzbekistan’s boom. The World Bank attributes its upgraded forecast partly to stronger-than-expected remittances and higher capital spending. In the first half of 2025, remittances sent home by Uzbek workers - mainly from Russia, Turkey, and South Korea - jumped 27% year-on-year to reach around $8.2 billion, providing a surge in household consumption. At the same time, both public and private investment are climbing. Government spending on infrastructure and industrial projects remains high, and foreign capital is flowing in at record levels. According to Uzbekistan’s Ministry of Investment, Industry and Trade, foreign direct investment reached about $10 billion in 2024, the highest on record. Projects span energy, agriculture, and information technology, with investors from South Korea, China, the Gulf states, and Europe among the most active. The International Monetary Fund’s 2024 Article IV Consultation observed that “robust investment and resilient consumption” have kept growth well above the overall regional average. Reforms Since 2016 Have Laid the Groundwork This acceleration did not happen by chance. Since President Shavkat Mirziyoyev came to power in 2016, Uzbekistan has pursued a series of market-oriented reforms to dismantle decades of economic isolation and stagnation. The government unified the exchange rate, lifted currency restrictions, and simplified customs and tax rules. It began privatizing state...

Economic Growth

World Bank: Central Asia to Lead Regional Growth in 2025 Despite Global Slowdown

Economic growth in Europe and Central Asia (ECA) is slowing but remains resilient amid global and regional challenges, according to the World Bank’s latest Europe and Central Asia Economic Update: Jobs and Prosperity, released on October 7, 2025. The report projects GDP growth in the region at 2.4% in real terms this year, down from 3.7% in 2024. The slowdown is primarily attributed to weaker growth in Russia. However, excluding Russia, which accounts for about 40% of the region’s total economic output, growth is expected to hold steady at approximately 3.3% in both 2025 and 2026. “Developing economies in the region need bold reforms to turn resilience into stronger growth in productivity, output, and jobs,” said Antonella Bassani, World Bank Vice President for Europe and Central Asia. She stressed the importance of strengthening the private sector, improving education systems, and attracting more private investment to generate quality employment and address demographic changes. Central Asia remains the fastest-growing subregion for the third consecutive year, with growth expected to rise from 5.7% in 2024 to 5.9% in 2025. The World Bank attributes this momentum to increased oil production in Kazakhstan, higher remittance inflows, and rising public and private investment. Turkey and Poland are also highlighted for their strong performance, with forecast growth rates of 3.5% and 3.2%, respectively, supported by solid consumer demand and capital investment. Despite these positive signals, the World Bank warns that sluggish growth and weak reform momentum are exacerbating challenges in the labor market. While employment across the ECA region has expanded by 12% over the past 15 years, particularly in the services sector, many of the new jobs are low-skilled and offer limited income potential. Demographic shifts pose another challenge. The region’s working-age population is projected to shrink by 17 million in the coming decades, especially in Eastern and Central Europe and the Western Balkans. In contrast, Central Asia and Turkey are expected to see population growth, intensifying the need to generate sufficient employment opportunities. The report recommends that countries invest in infrastructure, education, and private-sector development to improve productivity. “Each country can tailor its approach to best use its assets, human talent, physical infrastructure, institutions, and natural resources,” said Ivailo Izvorski, World Bank Chief Economist for Europe and Central Asia. In Central Asia, economic growth is expected to be driven by expansion in agrifood and livestock processing, transport and logistics along Eurasian trade corridors, renewable energy investment, and tourism development. The World Bank notes that these sectors, supported by the region’s cultural and natural heritage, could help position Central Asia as one of the world’s most dynamic emerging markets.