TASHKENT, Uzbekistan, December 12. Standard & Poor's (S&P Global Ratings) has confirmed the ‘B+’ rating in local and foreign currency for long-term credit obligations of the Ferghana region of Uzbekistan, and the outlook for the ratings is stable, Trend reports.
"The stable outlook reflects S&P Global Ratings' assumption that the Ferghana region will maintain high fiscal efficiency with transfers from the central government," the report by S&P Global Ratings says.
Furthermore, it is assumed that the region will not have debts to commercial creditors, except for changes in national legislation prohibiting local and regional governments from commercial borrowing.
Ferghana's region ratings are supported by the assumption of S&P Global Ratings that the region will maintain high performance in accordance with national legislation.
S&P Global Ratings believes that significant infrastructure needs will limit the prospects for economic development and reduce budgetary flexibility to some extent.
However, the backlog in financing probably will not lead to significant debt accumulation since national legislation prohibits commercial borrowing by local and regional governments, while currently the region's debt to commercial creditors is zero.
S&P Global Ratings assumes that Fergana's region's liquidity will remain strong, especially given the almost absence of debt; however, agency analysts believe that the region's debt service ratio may decrease sharply if the region attracts debt in the long term.
The Ferghana region has the right to receive interest-free budget loans to cover the lack of liquidity, and in 2022-2023 the region received 101 billion Uzbek soums ($8.18 million), with repayment in 2023–2024.
Nevertheless, according to S&P Global Ratings, these loans can be extended.