Moody’s upgrades Uzbekistan’s credit rating to Ba2 citing structural economic reforms

The credit upgrade reflects continuous advancements within Uzbekistan’s institutional framework and macroeconomic policy environment. Credit analysts highlighted the country's accelerating economic diversification and strengthened fiscal discipline as foundational reasons for the rating revision. Statistics validate this upward trajectory, with gross domestic product (GDP) expanding by 7.7% during the 2025 fiscal year and sustaining a notable 8.7% expansion rate during the first quarter of 2026. This performance marks a robust continuation of the past three years, during which domestic economic growth averaged 6.5%.

A significant factor contributing to Moody's positive reassessment is the systematic contraction of the national budget deficit. The fiscal shortfall was narrowed to approximately 2% of GDP by the conclusion of 2025, down sharply from the deficit of over 4% recorded in 2023. State expenditure consolidation was largely propelled by comprehensive energy sector subsidy overhauls.

Government reports indicate that state-backed natural gas subsidies were successfully scaled back from 1.4% to just 0.3% of GDP. This fiscal restructuring aligns with the government's broader legislative roadmap, which targets a total transition toward full cost-recovery pricing within electricity and natural gas utility tariffs between 2027 and 2028.

Furthermore, Moody’s pointed to the successful dual initial public offering (IPO) and listing of the National Investment Fund of Uzbekistan (UzNIF). Completed on both the London Stock Exchange and Tashkent Stock Exchange, the global equity placement raised approximately $691,500,000, drawing substantial capital volumes from major international asset managers. According to the credit rating agency, the overwhelming foreign investor participation serves as concrete evidence of the government's commitment to reducing state ownership in the domestic marketplace while enforcing rigorous global corporate governance standards across key commercial entities.

Alongside the sovereign upgrade, Moody’s adjusted the country’s local and foreign currency ceilings. The local currency ceiling advanced from Ba1 to Baa3, while the foreign currency bond and deposit ceiling moved from Ba3 to Ba2.

Looking forward into the 2026–2027 fiscal periods, the rating agency projects that Uzbekistan's real GDP growth will moderate slightly to between 6.1% and 6.3%. Despite this anticipated marginal deceleration, the country's growth vector is slated to remain among the highest recorded across all globally assessed sovereign economies. The newly assigned stable outlook reflects the culmination of the prior positive outlook issued exactly one year ago, confirming that the anticipated economic reforms have successfully translated into quantifiable sovereign credit progress.