World Bank expert urges Uzbekistan to manage external debt prudently 

Uzbekistan’s public debt reached $37 billion in the first half of 2024, with $30.9 billion attributed to external borrowing. Speaking at the International Partnership Initiatives Week in Tashkent, Pinar Yasar, a senior economist at the World Bank, emphasized the need for caution in managing the country’s external debt.

In an interview with a Kun.uz correspondent, Yashar discussed Uzbekistan’s external debt, inflation, and the economic challenges the nation faces. She noted that it is common for countries transitioning to a market economy to accumulate external debt, but stressed the importance of prudent financial management.

“We generally expect external debt to increase in countries transitioning to a market economy, as they require financial support. In Uzbekistan’s case, yes, debt is rising steadily. However, this growth must be handled with extreme caution. The key is to ensure that economic indicators improve in line with the debt. As the financial markets develop and production increases over time, the debt burden should decrease,” Pinar Yasar explained.

Regarding inflation, Yasar highlighted that while inflation in Uzbekistan is not excessively high, it requires careful monitoring. She pointed out that external factors, which the government cannot fully control, also play a role in inflation dynamics.

“Inflation is certainly a significant issue, but I wouldn’t say it is alarmingly high in Uzbekistan. Of course, global market prices are having an impact. Supply and demand factors are contributing to inflation as well. The Central Bank plays a crucial role here; their forecasts and swift decision-making can significantly influence inflation trends. While external factors are beyond the government’s control, inflation in Uzbekistan is still manageable, and there’s potential to reduce it further,” Pinar Yasar remarked.

She also emphasized the importance of reducing the state’s role in the economy, encouraging private sector activity, and further liberalizing markets as key challenges Uzbekistan must address moving forward.

Earlier, the World Bank recognized Uzbekistan as one of the fastest-growing economies in the Europe and Central Asia region.

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