The total amount of interest payments on Uzbekistan’s external debt in 2024 amounted to $3.3 billion, according to the Central Bank of Uzbekistan’s publication on the country's balance of payments, international investment position, and external debt for the past year, reports Gazeta.uz.
Uzbekistan’s external debt consists of public and private sector liabilities. However, the so-called private sector is largely composed of state-owned or state-affiliated companies and banks. The government owns about 65% of the banking sector, as well as stakes in UzAuto Motors, Uzbekneftegaz, NBU, Uzpromstroybank, and other enterprises, which in previous years issued debt securities worth billions of dollars.
Source: Microeconomik / Telegtam
According to Mirkonomika / Telegram, the $3.3 billion in interest payments included:
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$468 million on portfolio investments (Eurobonds),
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$2.8 billion on other debt instruments (loans).
Compared to 2019, payments on portfolio investments increased 10.4 times, while payments on other debt instruments grew almost fourfold.
Key Factors Behind the Rising Debt Servicing Costs
Economist Mirkomil Kholboev highlights two key reasons behind the growing external debt servicing costs:
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A significant increase in Uzbekistan’s external debt volume in recent years.
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A sharp rise in global interest rates due to high inflation in major economies.
About 40% of Uzbekistan’s public debt is tied to floating interest rates (data on corporate debt is unavailable). For comparison:
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In 2021, the 6-month SOFR (Secured Overnight Financing Rate) averaged 0.5%.
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By 2024, SOFR jumped to 5.3%, making debt servicing significantly more expensive.
Possible Relief in 2025?
Since mid-2024, global financial conditions have begun to ease, leading to a decline in international interest rates.
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The SOFR rate has already decreased from 5.3% to 4.3%, which could reduce borrowing costs and lower debt servicing expenses.
However, Kholboev warns that ongoing global economic uncertainty could delay further interest rate cuts, keeping debt servicing costs high.
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In 2024, interest payments on external debt increased by 33% ($805 million).
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In 2023, they almost doubled ($1.1 billion growth).
Uzbekistan’s External Debt Reaches Record Levels
At the end of 2024, Uzbekistan’s total external debt stood at $64.1 billion, equivalent to 55.7% of GDP—the largest annual increase in history ($10.8 billion in one year).
Additionally, in 2024:
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Interest payments on public debt rose 1.8 times, reaching 14.5 trillion soums (~$1.2 billion).
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Social welfare spending decreased, while education and healthcare expenditures increased.
CentralasianLIGHT.org
April 2, 2025