Ratio of Uzbekistan’s external debt to GDP to decrease from 2023

Uzbekistan’s development strategy for the next 5 years sets a goal of not exceeding the external debt to 60% of GDP. Director of the Public Debt Department under the Finance Ministry Jasur Karshibayev answered the question about the reality of this goal.

“There are mechanisms to keep external debt below 60%.

The first mechanism is the law. From 2021, the law on the state budget (there is a similar figure in 2022) stipulates that the balance of public debt should not exceed 60% of GDP. That is, the law obliges us to enforce it.

Based on this, we make calculations. To be honest, our people are concerned that the government intends to increase (external debt) to 60%. However, we do not intend to reach even 50%.

As a result of setting annual limits, our public debt has stabilized to date. For example, at the beginning of 2021, the volume of public debt to GDP was 38.8%, and during the year this figure decreased slightly, that is, the growth rate of public debt stabilized.

However, as a result of the disbursement of previously borrowed funds, there will be an upward trend for several more years, and from 2023-2024, the debt volume is expected to decrease, that is, it is expected to stabilize against GDP and decline.

Why is the limit set at 60%? In some neighboring countries, debt limits are also lower at the beginning. But we have seen in 2020 that there will be unexpected shocks, in which case GDP will not grow. If that is the case, we may have to reconsider the law. To prevent this, our target is set at 60%,” the Finance Ministry official said at an IPC session on January 12.

As of October 1, 2021, the total external debt of Uzbekistan amounted to $37.6 billion. This is 11% or $3.7 billion more than on January 1, 2021.

According to the state budget for 2022, the limited annual volume of new public debt agreements to be signed in 2022 is set at $4.5 billion, and the limited net volume of government securities issued on behalf of Uzbekistan – 6 trillion soums.

Uzbekistan’s total external debt is projected to reach $30.4 billion by the end of 2022.