TASHKENT, Uzbekistan, December 8. Standard & Poor's (S&P Global Ratings) expects Uzbekistan’s gross external financing needs to average about 92 percent of the country’s current account receipts and usable reserves over the next four years, Trend reports.
As per latest report by S&P Global Ratings, Uzbekistan's high development needs will keep imports and current account deficits elevated, while its commodity exports are susceptible to volatility in prices.
“Remittance inflows declined by one-third during the first nine months of 2023 to $8.4 billion, after almost doubling to $17 billion (21 percent of GDP) for the whole of 2022. The decline in 2023 likely reflects decreasing number of Uzbek workers in Russia, higher living costs in Russia, and the strengthening of the Uzbek soum against the Russian ruble. That said, remittances are still about 45 percent higher than in 2021. Russia remains Uzbekistan's largest remittance source, contributing about 80 percent of total remittances,” the agency notes.
S&P Global Ratings says that despite strong growth, the country's credit quality is constrained by relatively low GDP per capita when compared globally, estimated at $2,400 in 2023.
“That said, Uzbekistan benefits from favorable demographics, given that its population is young. Almost 90 percent of the population is at or below the working age, which presents an opportunity for labor-supply-led growth. However, it will remain challenging for job growth to match demand, in our view. Weakness in the Russian economy, where most of Uzbekistan's permanent and seasonal expatriates are employed, could further exacerbate this issue,” the S&P’s report states.