The World Bank's International Debt Report 2023 shows Uzbekistan grappling with an external debt of $49.1bn in 2022, a significant leap from 2010's $7.98bn. This data, coupled with additional insights on debt terms and creditor composition, offers a clear picture of the nation's financial obligations.
A Decade of Escalating Debt
Over the span of 12 years, Uzbekistan's total external debt exhibited a substantial and consistent upward trajectory, reflecting the country's growing reliance on external financing. Beginning at $7.98bn in 2010, the debt more than doubled by 2018, reaching $17.61bn, which marked an impressive growth of approximately 120.68%.
The upward trend continued into 2019, with the debt further increasing by 30.38% to $22.96bn. A significant jump was observed in 2020, when the total external debt soared by 46.82%, reaching $33.71 bn.
The following year, 2021, saw the debt rise further by 21.15%, reaching $40.84bn. By 2022, Uzbekistan's total external debt reached $49.10bn, marking a 20.23% increase from the previous year and culminating in a remarkable escalation over the 12-year period.
Over the years from 2010 to 2022, Uzbekistan's public and publicly guaranteed long-term external debt stocks exhibited a consistent and significant rise, as detailed in the Report. Starting at $3.42bn in 2010, this segment of the debt more than doubled to $9.28bn by 2018, reflecting a substantial increase of approximately 171.35%.
The upward trajectory continued in the following years, with the debt rising to $13.34bn in 2019 (a 43.75% increase from 2018), and then expanding further to $18.73bn in 2020, marking a 40.40% growth from the previous year.
Growth persisted into 2021, with the debt reaching $21.92bn, a 17.03% increase from 2020, and by 2022, it had climbed to $24.90bn, growing by another 13.59%. These figures not only underscore the rapid and sustained increase in this aspect of Uzbekistan's debt but also suggest a strategic diversification in the sources of public debt over this period, reflecting varying phases in the country's economic and financial management strategies.
New Debt Commitment Terms in 2022
Figure 2, provides a detailed breakdown of the average terms on new debt commitments for Uzbekistan in 2022, highlighting a stark contrast between official and private creditors. Official creditors, which form a substantial part of Uzbekistan's debt structure, offered relatively lenient terms, featuring an average maturity period extending over 20 years, coupled with a grace period of about 5 years, and a comparatively low interest rate close to 1.5%.
This contrasts with the terms set by private creditors, who stipulated notably stricter conditions: the average maturity for debts from these sources was around 7 years, with a shorter grace period of approximately 2 years, and a higher interest rate just over 4%. This divergence in terms underscores the varying degrees of financial flexibility and pressure that different types of creditors impose on Uzbekistan's economy.
Creditor Composition and Influence
In 2022, Uzbekistan's public and publicly guaranteed debt composition, as detailed in Figure 1 of the Report, presents a diverse creditor landscape. Multilateral creditors form the largest portion, accounting for 52% of the total debt, with significant contributions from the Asian Development Bank at 24% and the World Bank-IDA contributing 12%. This highlights the substantial role of international financial institutions in Uzbekistan's debt structure.
Bilateral debt, comprising 23% of the total, is notably influenced by major lending countries such as Japan (9%), China (8%), and France (2%), reflecting the geopolitical and economic ties Uzbekistan maintains with these nations.
Additionally, the private sector represents a significant 25% of the debt, with bondholders alone making up 14% and other commercial entities accounting for 11%. This indicates a considerable involvement of private capital in Uzbekistan's debt profile, underscoring the country's exposure to global financial markets and the associated risks and opportunities.
Uzbekistan's Debt-GDP ratio
source: tradingeconomics.com
In 2022, Uzbekistan's government debt reached 36.40% of its Gross Domestic Product (GDP), signifying a notable increase from the country's average government debt-to-GDP ratio of 24.77% recorded from 1998 to 2022. This ratio, which peaked historically at 59.40% in 2001 and reached its lowest at 6.70% in 2011, reflects the fluctuating nature of the nation's fiscal management and economic health. The 2022 figure indicates a moderate level of government debt relative to the nation's economic size, suggesting a manageable debt burden compared to the extreme highs and lows experienced in the past.
Analysis based on the World Bank International Debt Report 2023 and additional financial data
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