According to the mission, real GDP expanded by 7.6 percent year-on-year during the first nine months of 2025, supported by strong investment activity and household consumption. Despite robust demand, both headline and core inflation eased to 7.8 percent and 6.6 percent, respectively, by the end of October, as last year’s administrative energy price adjustments faded, the UZS strengthened, and monetary policy remained tight.
The IMF also highlighted strong household lending, which grew 23 percent year-on-year in September, while corporate credit expanded more modestly. The external current account deficit narrowed significantly in the first half of the year, supported by high global gold prices, growth in non-gold exports, and strong remittance inflows. As of end-October, international reserves stood at the equivalent of 12 months of prospective imports.
Balanced outlook, with risks tied to spending and external conditions
The Fund described the economic outlook as “broadly positive”, projecting GDP growth above 7 percent this year and around 6 percent in 2026, driven by continued investment and consumption. Inflation is expected to gradually converge to the Central Bank of Uzbekistan’s 5 percent target by the end of 2027.
However, the IMF warned that risks remain. Higher-than-expected revenues, particularly from gold, have increased pressure for additional government spending and for expanding directed or preferential lending. Such moves, the Fund cautioned, could lead to overheating in a high-demand environment. External risks include uncertainties in the global economy, geopolitical tensions, and commodity price volatility. Meanwhile, accelerated reforms, stronger capital inflows, and higher gold prices could strengthen the outlook.
IMF calls for spending discipline and broader tax reforms
The mission emphasized the need for fiscal restraint, urging the government to avoid increasing expenditures in response to higher-than-budgeted revenues. While revenue overperformance in 2025 allowed for additional spending, the IMF warned that continued expansion could amplify inflationary pressures, cause an unwarranted appreciation of the real exchange rate, and expose the economy to vulnerabilities if gold prices decline.
The authorities maintain their commitment to keeping the consolidated fiscal deficit at 3 percent of GDP in both 2025 and 2026. The IMF recommended using revenue windfalls to build fiscal buffers and reduce macroeconomic volatility.
