ASIATODAY.ID, TASHKENT — An International Monetary Fund (IMF) staff mission has concluded its visit to Uzbekistan on November 27, 2025 with striking findings: the Central Asian nation is experiencing one of the strongest economic expansions in the region, inflation is cooling, and foreign reserves remain comfortably high.
The IMF, however, cautions that this rapid growth presents a critical moment for accelerating structural reforms and strengthening macroeconomic resilience.
Uzbekistan’s Economy Surges: 7.6% Growth, Inflation Eases
Led by Yasser Abdih, the IMF team reported that Uzbekistan’s real GDP jumped 7.6% year-over-year in the first three quarters of 2025, driven by vigorous investment and household consumption.
Despite strong domestic demand, inflation has moderated:
Headline inflation fell to 7.8%,
Core inflation eased to 6.6%,
Supported by exchange rate appreciation, a restrictive monetary stance, and fading effects of last year’s energy price adjustments.
The financial sector also performed robustly:
Household lending soared 23% y/y,
Corporate lending grew more moderately.
Externally, the current account deficit narrowed sharply, supported by strong gold prices, growing non-gold exports, and stable remittance inflows.
Uzbekistan’s international reserves stood at the equivalent of 12 months of prospective imports, a level the IMF considers very strong.
Outlook Remains Positive, but Risks Persist
The IMF expects Uzbekistan to maintain above-7% growth in 2025 and roughly 6% in 2026. Inflation is projected to gradually decline toward the Central Bank of Uzbekistan’s target of 5% by 2027.
Still, several risks could derail the outlook:
Procyclical government spending fueled by higher-than-expected revenues, especially gold-related income,
Pressure to expand directed or preferential lending schemes,
Global economic uncertainty, geopolitical tensions, and commodity price volatility.
On the upside, faster structural reforms, stronger capital inflows, and high gold prices could further boost economic momentum.
IMF Urges Uzbekistan to Restrain Public Spending
IMF staff insist that Uzbekistan must use this period of rapid growth and high gold revenues to build fiscal buffers and strengthen macroeconomic stability.
Authorities remain committed to keeping the fiscal deficit at 3% of GDP in 2025 and 2026. Yet IMF warns that spending increases driven by revenue overperformance could:
Fuel inflation,
Trigger unwarranted real exchange rate appreciation,
Increase vulnerability to a sudden gold price correction.
Tax Reform: Broaden the Base, Combat the Shadow Economy
The IMF welcomed the government’s plan to roll out a medium-term revenue strategy and implement major tax administration reforms. Key priorities include:
Limiting new tax incentives,
Measuring and publishing tax expenditures,
Strengthening on-site audits,
Enhancing enforcement power while protecting taxpayer rights.
Monetary Policy Must Stay Tight
The Central Bank of Uzbekistan has held its policy rate at 14% since March 2025. IMF staff support maintaining this tight stance until inflation is firmly declining toward target.
The mission also praised Uzbekistan’s shift toward greater exchange rate flexibility since April 2025, noting that it improves resilience to external shocks and supports inflation targeting.
Accelerate Financial Sector Reform
The IMF strongly encourages Uzbekistan to speed up the phase-out of directed and preferential lending. It also recommends full implementation of the 2025 Financial Sector Assessment Program (FSAP) across all relevant institutions, including the Ministry of Economy and Finance.
Structural Reforms Are Crucial for Sustained Growth
To secure long-term economic strength, the IMF highlights several urgent priorities:
Privatizing and restructuring major state-owned enterprises,
Improving corporate governance,
Strengthening competition and the business climate,
Boosting productivity while reducing the state’s economic footprint.
The IMF also praised Uzbekistan’s progress toward joining the WTO by March 2026, as well as recent advances on anti-corruption laws, conflict-of-interest regulations, whistleblower protections, and asset declaration rules. (AT Network)
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