Fitch Ratings places Uzbekistan in sovereign credit rating

The international rating agency Fitch placed Uzbekistan in a long-term "BB-" rating in local and foreign currencies, Kun.uz correspondent reports referring to the press service of the agency.

The forecast is stable and, as analysts emphasize, this is due to the low level of public debt and data on high economic growth, especially compared to other countries that are characterized by strong commodity dependence and high inflation.

In addition, the agency predicts economic growth from 5% to 5.3%. It will occur at the expense of public investment in strategic projects, as well as infrastructure and housing costs.

If the republic shows progress in strengthening macroeconomic stability, the country’s position in the rating will improve further. However, a steady decline in foreign exchange reserves and a weakening of the sovereign balance can lead to negative consequences.

It should be recalled that earlier the Central Bank of Uzbekistan presented two scenarios for the development of the economy - the base and the risk.

In 2019, inflation in the baseline scenario is expected to be in the range of 13.5-15.5%, in 2020 - 10-12%, in 2021 - will be below 10%. At the same time, the deterioration of the situation in the Russian economy can seriously affect inflation in Uzbekistan.

“Our risk scenario implies a deterioration in both foreign and domestic economic conditions. This is mainly due to the slowdown in economic growth of Uzbekistan’s major trading partners, particularly Russia. As a result, inflation rate in our country may be higher. For example, next year it can be 17-18%,” Rustam Makhammadiev, head of the Central Bank’s Monetary Policy Department, said.

For information, the economic viability of states is assessed by major international rating agencies, among the most reputable are Moody’s, Standard & Poor's and Fitch Ratings.

The largest bank of the USA in terms of assets JP Morgan Chase acted as a consultant of Uzbekistan in obtaining a sovereign credit rating and in issuing sovereign bonds.