The international rating agency S&P Global Ratings published a regular report on the Republic of Uzbekistan. Accordingly, Uzbekistan's rating has been maintained at 'BB-', while the outlook has been raised from 'negative' to 'stable'.
The S&P rating agency assigned the Republic of Uzbekistan a sovereign credit rating for the first time on December 21, 2018. The agency twice a year reassesses the sovereign credit rating of Uzbekistan and, during the assessment, gets acquainted with the latest economic news in the country.
Since June 2020, S&P cut the credit ratings of 21 countries and the forecast indicators of 13 countries, including Uzbekistan, have been changed to “negative”.
This decision was attributed to the relatively high growth of Uzbekistan's external debt over the past two years. At the same time, it was reported that the credit rating of Uzbekistan may decrease if the growth of the country's external debt does not stabilize over the next 12 months.
Officials from the Ministry of Finance, the Central Bank and the Ministry of Economic Development and Poverty Reduction of the Republic of Uzbekistan provided information on the macroeconomic situation in the country and ongoing reforms during conference calls held on May 10-11 this year.
As a result of these conference calls, a meeting of the S&P credit committee was held, at which Uzbekistan’s outlook has been raised from "negative" to "stable" for the following reasons.
1. As noted by S&P, in 2020 Uzbekistan was one of the few countries in the world achieved economic growth (1.6%).
According to the agency, the main reasons for economic growth were the functioning of the agricultural and industrial sectors, despite the restrictions associated with COVID-19, the implementation of large infrastructure and investment projects in line with the government's swift measures to stimulate the economy.
According to the agency's forecasts, in 2021 the economy of Uzbekistan will grow by 4.8%, and the service sector will be the main driver of growth.
2. According to the report, the growth of external debt has slowed down, while short-term fiscal and external risks have decreased.
