S&P Global Ratings reviews forecast for Uzbekistan's economy

Finance Materials 7 April 2021 13:00 (UTC +04:00)
S&P Global Ratings reviews forecast for Uzbekistan's economy

BAKU, Azerbaijan, April 7

By Jeila Aliyeva - Trend:

S&P Global Ratings expects the business of Uzbek banks to continue to grow from 2021 through 2022, Trend reports with reference to S&P Global Ratings.

The risks to Uzbek banks have generally stabilized, said the report, adding that Uzbekistan's economy grew in 2020, despite the recession in the main trading partner countries and the spread of the coronavirus COVID-19 pandemic.

Also, S&P Global Ratings expects Uzbekistan’s reserve spending to be around 2 percent in 2021, compared to 2.6 percent in 2020.

In regards of the impact coronavirus COVID-19 to Uzbekistan’s economy, the message said that the consequences of the pandemic remains manageable. Thus, the support measures provided by the Government of Uzbekistan have helped to reduce the stressful effects on the country's economy and households.

“Uzbekistan's GDP continued to grow in real terms in 2020, amounting to 1.6 percent, and we believe that in from 2021 through 2022 it will increase to about 5 percent.”

Besides this, S&P Global Ratings sees stability of Uzbekistan’s banking sector indicators to the consequences of the COVID-19 pandemic.

“The impact of the economic slowdown on Uzbek banks was milder than we expected. In this regard, we have revised the assessment of the trend in the economic risk of the Uzbek banking system from negative to stable,” says the report.

S&P Global Ratings also expects credit growth in nominal terms to remain strong at up to 30 percent from 2021 through 2022, compared with 27 percent in 2020. The level of spending on the formation of reserves will be about 2 percent, which is better than the 2.6 percent figure for 2020. Also, the volume of non-performing loans will gradually increase to just over 2 percent - the figure for 2020 — and will remain at this level from 2022 through 2023.

Follow the author on Twitter: @JeilaAliyeva