The Central Bank has developed preliminary forecasts for Uzbekistan's balance of payments for 2025 based on both the baseline and alternative scenarios. This is mentioned in a brief overview from the regulator, dedicated to the balance of payments, investment position, and external debt.
Baseline Scenario
In 2025, the Central Bank anticipates a slight slowdown in economic growth among Uzbekistan's main trading partners: according to IMF data, China's economy may grow by 4.5% (4.8% in 2024), Russia by 1.3% (3.6%), Turkey by 2.7% (3.6%), and Kazakhstan by 4.6% (3.5%).
In the context of the global geopolitical situation and economic uncertainty next year, the regulator forecasts that prices for certain precious and non-precious metals (gold, silver, copper, uranium) will remain at relatively high levels without fluctuations.
Additionally, after a period of low prices for cotton in 2024, a slight increase in prices is anticipated due to a reduction in global gross supply.
As a result of ongoing reforms in the fields of tourism and IT, an overall increase in exports of 9–11% is expected in 2025 compared to 2024.
Conversely, imports in 2025 may rise by 8–10%. Among the reasons are a GDP growth of 5.5–6%, which will reflect in increased imports of machinery and equipment, vehicles, petroleum products, food, and raw materials, as well as government plans to reduce the budget deficit.
Positive trends in labor migration, observed this year, such as rising economic activity and wages in host countries, along with an increase in the share of high-income countries in migration geography, are expected to persist in 2025, leading to a 10–12% increase in international remittances to Uzbekistan.
Furthermore, the gradual easing of global financial conditions and lower interest rates will result in reduced costs for servicing loans and credits obtained from non-residents at floating rates.
For 2025, an increase in the positive balance of primary and secondary income components by 8–10% compared to 2024 is forecasted, which will help cover the negative balance of the trade balance.
According to preliminary analysis, the Central Bank predicts that by the end of 2025, the negative balance of the current account of the balance of payments is expected to be around 5–6.5% of GDP.
The current account deficit will be financed through a net inflow of foreign direct investments (expected investments in energy, mining, and chemical industries, machinery, textiles, and the banking and financial sector), portfolio investments (issuance of new eurobonds in international capital markets), and external borrowings.
Alternative Scenario
In the alternative scenario, by the end of 2025, the Central Bank forecasts a negative balance of the current account of the balance of payments at the level of 6.5–8% of GDP.
Factors that may influence the formation of the balance of payments include:
- increased geopolitical tension and fragmentation in international trade, which may lead to a lower level of economic activity among Uzbekistan's main trading partners and a decline in external demand;
- a decrease in global prices for key export goods, such as precious and non-precious metals, cotton raw materials, and food products;
- an increase in global inflation and the continuation of tight monetary policy, which will lead to higher costs for servicing external debt and a decline in foreign investment inflows.
“A reduction in cross-border remittances due to increased volatility in exchange rates in traditional host countries for labor migrants and disruptions in payment systems as a result of tightening international sanctions,” the regulator notes.
Moreover, an increase in aggregate demand resulting from rising final consumer expenditures and investment activity may lead to an increased volume of imports of machinery and equipment, vehicles (large goods within state and private investment projects), energy resources, and other raw materials.
Earlier, Spot reported that Uzbekistan's total external debt exceeded $60 billion.