Uzbekistan’s 2026–2028 debt plan keeps state debt near one-third of GDP, expands local-currency financing, and shows how a BRICS partner country is trying to fund growth without losing fiscal control.
Quick Insights
- Uzbekistan entered 2026 with state debt of $46.9 billion, equal to 31.9% of GDP, and its preferred financing scenario aims to keep that ratio close to 31.0% by the end of 2028.
- The government selected a financing mix of 70% external borrowing and 30% domestic borrowing, while the 2026 annual plan sets out $4.9 billion for budget support, net 30 trillion soum in government securities and Eurobonds, and $2.5 billion for investment projects.
- Uzbekistan’s domestic bond market has been scaled up aggressively: net issuance rose from roughly 3.4 trillion soum in 2020 to 30 trillion soum in 2025, and securities sold to foreign investors in the domestic market reached 1.3 trillion soum in January–November 2025.
- The state wants to lift its sovereign rating to investment grade BBB- by 2030, yet the debt portfolio still carries heavy foreign-currency exposure, with 87.5% of debt denominated in foreign currencies as of October 2025.
Era Shift
What does prudent borrowing look like when a fast-growing Central Asian economy enters the wider BRICS orbit? In Uzbekistan’s case, it looks far less like a geopolitical flourish and far more like a technocratic balancing act. The country, which became a BRICS partner country in 2025 rather than a full member, has published a debt strategy built around fiscal limits, diversified funding sources, and a deeper domestic bond market. In other words, the document speaks the language of restraint even while growth ambitions remain high.
The backdrop matters. The strategy says real GDP growth averaged 6.1% a year from 2020 to 2025, accelerated to 7.7% in 2025, and helped expand nominal GDP from $70.1 billion in 2020 to $147.1 billion by 2025. It also ties debt management to Uzbekistan’s goal of reaching upper-middle-income status by 2030 and notes that the strategy was developed using IMF and World Bank methodology. The World Bank’s latest macro outlook likewise says the economy grew 7.7% in 2025 and is projected to grow 6.4% in 2026, reinforcing the sense that Tashkent believes it still has room to invest, but only if it can preserve credibility.
That is why the opening message of the document is so important. Uzbekistan is not presenting debt as an emergency. It is presenting debt as a tool that must now be managed more carefully, because the next phase of development will be judged less by how much money can be borrowed and more by whether borrowing remains cheap enough, long enough, and transparent enough to sustain growth.
Key Developments
The strategy’s hard numbers explain the government’s confidence.
As of 2026, state debt stood at $46.9 billion, including $39.8 billion in external debt and $7.0 billion in domestic debt. The document also argues that debt remains moderate by international standards and points to the IMF’s 2025 assessment that risks related to Uzbekistan’s government debt are low. Borrowing, meanwhile, has not been abstract.
External debt has funded budget support, the electric power sector, agriculture and water resources, housing and communal services, transport infrastructure, fuel and energy, and education, healthcare and IT, with the largest single allocation going to budget support at $17.4 billion.
The creditor mix is equally revealing. As of October 2025, 64.5% of the debt portfolio consisted of loans and credit lines, 13.4% came under state guarantees, and 22.1% consisted of government securities, including sovereign international bonds and local treasury securities.
The biggest listed external creditors were the World Bank at $8.0 billion, the Asian Development Bank at $7.5 billion, international investors at $5.8 billion, Chinese financial institutions at $3.8 billion, Japanese financial institutions at $3.1 billion, and the Asian Infrastructure Investment Bank at $1.7 billion. That list is telling: the strategy does not show Uzbekistan replacing established multilateral lenders with BRICS-linked institutions. In fact, the New Development Bank does not appear in the creditor table at all. Meanwhile, the World Bank says its own Uzbekistan country program comprised 27 projects with $5.6 billion in net commitments as of April 2026, with more than 60% of that financing provided through highly concessional IDA credits.
The government’s preferred financing path is also explicit. After testing four scenarios, it selected Strategy One, which would finance borrowing needs with 70% external sources and 30% domestic sources. Under that path, the debt-to-GDP ratio is projected to edge down to about 31.02% by end of 2028, the weighted average interest rate on state debt is expected to decline from 4.93% to 4.82%, and interest payments are projected to fall from 1.39% of GDP to 1.28%. At the same time, the average time to maturity of the total portfolio is expected to lengthen from 7.9 years to just over 9 years. This is not a strategy built around radical deleveraging. It is a strategy built around improving the shape of the debt stock.
The most dynamic shift lies in the domestic securities market. Net issuance of government treasury securities rose from about 3.4 trillion soum in 2020 to 30 trillion soum in 2025, while the number of auctions climbed from 22 to 121. Outstanding government securities reached 49.9 trillion soum in 2025, and the average maturity profile improved sharply, with instruments of three years or more accounting for 69% of 2025 issuance. Foreign participation is rising too: government securities sold to foreign investors through primary dealers reached 1.3 trillion soum in January – November 2025, up from 508 billion soum in 2024. The government now wants buyback and switch operations, stronger primary dealers, and market infrastructure that can attract more foreign investors into the local market.
Political Outlook
Politically, the strategy is about message discipline as much as debt discipline. It promises publication of the debt management strategy and annual borrowing plan, proposes strengthening Parliament’s role in approving state external debt, calls for proactive communication with foreign investors, and sets out a structured engagement plan with rating agencies. The ambition is transparent: Uzbekistan wants to raise its sovereign credit rating to BBB- investment grade by 2030. That target already looks slightly more plausible than it did a year ago because S&P Global Ratings upgraded Uzbekistan to BB in November 2025, yet it remains a long climb that will depend on fiscal credibility, institutional reform, and continued growth.
The domestic political consequence is more demanding. Since 2021, the authorities have been shifting projects by state-owned enterprises and banks toward independent financing without state guarantees. By end-2025, 15 state-owned enterprises had obtained international credit ratings, and Uzbekneftegaz, UzAutoMotors, Navoi MMC, Navoiuran, SQB, National Bank, Agrobank, and Ipoteka Bank had issued international bonds and raised commercial loans totaling the equivalent of $8.1 billion without state guarantees. That is a major move away from implicit sovereign backstopping. It gives firms more autonomy, but it also exposes them more directly to market pricing, governance scrutiny, and refinancing pressure. The IMF, for its part, still warns that contingent liabilities from SOEs, banks, and public-private partnerships remain downside risks to the macro outlook.
This is where politics and economics merge. The state wants to reduce the fiscal burden of supporting enterprises, but it cannot afford disorderly losses of investor confidence in major state-linked borrowers. That makes debt management a credibility exercise across the public sector, not just at the ministry level. Put differently, the strategy is asking Uzbekistan’s political system to become more rules-based at the same time that it asks its large firms to become more market-based.
Economic Outlook
The economic winners are easy to spot. The sectors already absorbing the largest volumes of external debt—electric power, agriculture and water, housing and communal services, transport, and fuel and energy—are precisely the sectors likely to benefit most if concessional funding continues and the local bond market deepens without triggering a jump in borrowing costs. The strategy also makes clear that long-term concessional loans will continue to support both the budget and investment projects, while annual sovereign international bond issuance will remain on the table when market conditions allow.
Several companies and institutions now sit directly inside that story. In November 2025, AIIB approved a $500 million sovereign Green and Resilient Market Economy Program for Uzbekistan, co-financed with the World Bank, to support reforms in energy, state-owned enterprises, green procurement, and carbon-credit rules. Then, in May 2026, AIIB signed a $107 million loan with Acwa Power for the 300 MW Bash 2 wind power plant in Bukhara region. AIIB says the project should generate about 943 GWh of electricity annually, supply more than 336,000 households, and avoid roughly 475,000 tons of CO2 emissions, while being co-financed with ADB and Standard Chartered. This is exactly the kind of sustainability-linked, cross-border capital stack that stands to scale if Uzbekistan can preserve market confidence.
Technology is part of the same pattern. AIIB also approved a $100 million CNY-denominated nonsovereign loan to Uztelecom to help finance the expansion of its high-speed wireless and fixed broadband network. That matters because the debt strategy explicitly includes education, healthcare, and IT among funded sectors and repeatedly links long-term growth to structural modernization. In parallel, the domestic bond-market reforms create upside for the country’s nine primary dealers — SQB, Ipak Yuli Bank, Xalq Bank, NBU, Kapital Bank, Asia Alliance Bank, Ipoteka Bank, BRB, and Asaka Bank — because larger issuance volumes, benchmark bonds, buyback operations, and higher foreign participation can all deepen market-making activity and fee generation.
Yet the risks remain substantial and they are not abstract. As of October 2025, 87.5% of state debt was denominated in foreign currency, while the currency composition was still dominated by the US dollar at 62.9%, followed by the euro at 8.4%, the yen at 6.4%, and the yuan at 2.8%. The preferred strategy would still leave FX debt at 87.47% by end-2028, and the share of debt maturing within one year is projected to rise to 11.83%, even if it remains below the strategy’s own 15% ceiling. The document itself says sharp deviations in macroeconomic forecasts, inflation, exchange rates, interest rates, or contingent liabilities could force revision. The IMF adds that tighter external financing conditions, volatile commodity prices, and risks from SOEs and PPPs remain important downside threats. For corporates such as Uzbekneftegaz, UzAutoMotors, and state-linked banks, the message is therefore mixed: more market access, yes, but also more exposure to external pricing and currency swings.
BRICS and Major Economy Comparison
The BRICS angle is real, but it needs precision. Uzbekistan is a BRICS partner country, not a full BRICS member. Its debt strategy does not point to any direct New Development Bank exposure, and its creditor profile still leans heavily toward the World Bank, ADB, AIIB, and market investors. Even so, there is a clear thematic overlap with the broader BRICS development narrative. The New Development Bank’s 2022–2026 strategy targets $30 billion in approved financing, aims to deliver 30% of financing in local currencies, and wants 40% of approvals to support climate mitigation and adaptation. Uzbekistan’s strategy—deeper local-currency bonds, climate-linked investment, diversified funding sources, and reduced dependence on any single currency—moves in a similar direction, even if the financing map still remains broader than the BRICS ecosystem alone. That is an inference from the policy design, not evidence of a formal BRICS financing pivot.
The contrast with the G7 is equally sharp. The IMF’s 2025 Fiscal Monitor notes that many major economies already have public debt above or projected to exceed 100% of GDP, including Canada, France, Italy, Japan, the United Kingdom, and the United States, and stresses that these countries typically benefit from deep and liquid sovereign bond markets. Uzbekistan is the opposite case: it has a much lower debt burden, but also a narrower margin for policy error because its domestic market is still being built and foreign-currency exposure remains high. That is why Tashkent’s strategy is not trying to emulate the debt scale of mature economies. It is trying to build enough domestic-market depth to reduce vulnerability without sacrificing access to concessional external finance.
Regional spotlight.
Central Asia is becoming more visible inside the enlarged BRICS conversation. The official BRICS lists show that Kazakhstan and Uzbekistan both became partner countries in 2025. Uzbekistan’s borrowing priorities—power, water, housing, transport, and digital networks—show why that matters: the region’s relevance is being built through infrastructure and reform capacity, not through debt expansion for its own sake. The country’s strategy suggests that Central Asia’s role inside BRICS-related debates will be shaped less by bloc rhetoric and more by whether these states can convert external financing into disciplined, investable growth stories.
What Comes Next
The next phase will be decided by execution. If global rates ease gradually, if inflation continues to fall, and if fiscal discipline holds, Uzbekistan could enter 2027–2028 with a more credible local yield curve, a broader foreign investor base in soum debt, and a stronger platform for future sovereign and corporate issuance. The strategy already reduces the annual external borrowing limit from $5.5 billion in 2025 to $5.0 billion in 2026, and it pairs that restraint with continued treasury-market development rather than abrupt borrowing cuts. In that sense, the state appears to be betting that market quality can improve even while debt quantity stabilizes.
Still, the official warning lights remain on. The strategy says it may need revision if GDP, inflation, budget deficits, exchange rates, or interest-rate trends diverge significantly from forecasts, while the IMF continues to flag tighter external financing conditions and contingent liabilities as notable risks. What should be watched most closely over the next year is therefore not just the headline debt ratio, but the mechanics underneath it: whether buyback and switch operations actually arrive, whether foreign investors increase participation in the domestic market, whether communication with rating agencies sharpens, whether hedging tools begin to be used, and whether the state can keep national-currency debt at or above its planned 12.5% minimum share while still protecting growth.
