BAKU, Azerbaijan, Dec. 7
By Klavdiya Romakayeva - Trend:
The S&P rating agency noted that Uzbekistan's foreign economic position remains quite strong compared to countries with comparable ratings, and the government's net debt remains low and maintains the ratings, Trend reports citing the Standard & Poor's (S&P) Global Ratings agency.
The agency has affirmed Uzbekistan's long-term and short-term sovereign credit ratings on liabilities in national and foreign currencies at BB- / B, the outlook remains negative.
The forecast reflects the possibility that the external debt of Uzbekistan’s government could continue to increase rapidly.
The S&P outlook could downgrade the ratings if it assumes that rapid growth in external debt does not slow down as the agency expects. This can happen, for example, if current investment needs lead to larger than expected budget deficits or external deficits.
According to the release the authorities have made progress in implementing reforms and fulfilling tasks but are forced to start development from a low level.
“We believe that the decision-making process will remain highly centralized, concentrated in the hands of the president,” the release said.
The agency believes that this makes the decision-making process less predictable. In addition, the
Earlier it was reported that total government debt at the end of 2021 is projected at $28.4 billion, or 44.9 percent of GDP. Despite the growth dynamics, the public debt remains moderate, at a level safe for macroeconomic stability, which is estimated at 60 percent of GDP.
This year, the growth of public debt is associated with the attraction of external borrowings to finance additional budget expenditures to overcome the negative consequences of the pandemic. For these purposes, the Anti-Crisis Fund was created at the expense of concessional loans from international financial institutions.
At the same time, the state external debt is projected at $25.5 billion at the end of 2021, of which $18 billion is raised on behalf of Uzbekistan, and $7.5 billion is guaranteed by Uzbekistan.
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