BAKU, Azerbaijan, Aug. 23
By Klavdiya Romakayeva - Trend:
The Fitch Rating Agency has affirmed the long-term rating of the capital of Uzbekistan at 'BB-' with a 'stable' outlook according to which, despite the economic consequences of the coronavirus and rising costs, they are balanced by a moderate level of debt, Trend reports citing Fitch Ratings.
It is reported that at the same time, the taxes levied amounted to 30 percent of the city's total revenues in 2020. Transfers from the government have gradually increased over the past five years and reached 57 percent of total revenues in 2020, up from 14 percent in 2016.
“The financial autonomy of the city is controlled by the central government, which sets all tax rates and determines the number of tax revenues to be distributed among the state levels. The availability of additional taxation is also limited by the low disposable income of the population (the average monthly wage in Tashkent in 2020 was about $375),” the agency said.
It is noted that expenditures over the past five years have been volatile due to the reallocation of liabilities on them. Spending was also impacted by high, albeit declining, inflation, which stood at 13 percent in 2020, while peaking at 17.9 percent in 2018.
The city administration spent most of all funds on education and medicine, which accounted for up to 30 percent of the funds spent last year. According to Fitch analysts, the dynamics of expenditures are balanced by revenues, but there is a risk that government decisions may negatively affect the spending of funds.
At the same time, the city's investment program, which accounts for 23 percent of total spending in 2020, could provide some leeway in the short term. In the long term, capital investment pressures may persist due to Tashkent's high infrastructure needs.
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