Uzbekistan’s 2024 budget: Borrowing sources and spending priorities

As of today, Uzbekistan's public debt stands at \$42.4 billion. This amount includes both domestic and external obligations. The debt now accounts for 33.5 percent of the country's gross domestic product (GDP). According to Minister of Economy and Finance Jamshid Kuchkarov, there is no cause for concern regarding the consistent growth of public debt in recent years. He emphasized that the legally established limit has not yet been exceeded. Nevertheless, despite the minister’s reassurances, the sharp increase in debt continues to raise concerns among the public, especially amid the current sensitive geopolitical climate. This article explores how external debt is being utilized, its growth trajectory, and other related developments.

How much is the public debt growing?

Official data indicates that Uzbekistan’s public debt has increased steadily over the past five years:

- \$23.3 billion in 2020
- \$26.3 billion in 2021
- \$29.2 billion in 2022
- \$34.9 billion in 2023
- \$40.2 billion in 2024

It is important to note that these figures reflect only government debt. According to the Central Bank, when including external debt raised by the private sector, Uzbekistan’s total debt increased by \$10.8 billion in 2024 compared to the previous year. As a result, the total debt reached \$64.1 billion, amounting to 55.7 percent of GDP.

As previously reported, the approved state budget for the year was later amended to increase expenditures, raising the limit on external debt from \$5 billion to \$7.3 billion. These changes sparked public criticism. In many countries, such increases in spending require approval from legislative bodies. However, in Uzbekistan’s case, the Ministry of Economy and Finance waited until the end of the year to submit the request. After a brief nine-minute discussion in the Legislative Chamber, the amendments were passed. The revised law, approved by the Senate on December 18, was subsequently signed into law by the President on December 24.

Who is Uzbekistan borrowing from?

In 2024, Uzbekistan borrowed from a number of international organizations and foreign governments. International financial institutions were the largest lenders, accounting for \$19.14 billion, or 57 percent of the country’s total external debt. The key lenders include:

- Asian Development Bank – \$7.41 billion
- World Bank – \$7.63 billion
- Islamic Development Bank – \$900 million
- Asian Infrastructure Investment Bank – \$1.65 billion
- Other institutions – various amounts

Additionally, Uzbekistan received loans from several foreign government financial institutions. Among these, China ranks first:

- China Development Bank and China Exim Bank – \$3.76 billion
- Japan International Cooperation Agency – \$2.88 billion
- French Development Agency – \$977 million
- Korea Exim Bank and Korea Economic Development Fund – \$740 million
- German State Bank – \$415 million
- Saudi Development Fund – \$139 million
- Spanish State Bank – \$66 million
- Others – various amounts

What are the loans used for?

A significant portion of Uzbekistan’s external debt—approximately 45 percent—is allocated to budget support. The fuel and energy sector accounts for the next largest share, at 17 percent. Other sectors receiving external financing include:

- Transport and transport infrastructure – 8 percent
- Agriculture and water management – 9 percent
- Housing and communal services – 8 percent
- Support for business and industrial production – 2 percent
- Chemical industry – 2 percent
- Healthcare, education, information and communication technologies, and other sectors – 7 percent

According to Economy and Finance Minister Jamshid Kuchkarov, as of April 1 this year, Uzbekistan’s total public debt stood at \$42.4 billion, including \$35.6 billion in external debt and \$6.9 billion in domestic debt. While public concerns remain over the annual growth of national debt, the minister described the current level as moderate and in line with international standards.

He noted that the Law on Public Debt sets a maximum debt ceiling at 60 percent of GDP. At present, the country’s debt stands at 33.5 percent of GDP.

“Whether in cities, villages, or neighborhoods—development is visible everywhere, and part of the funding for these improvements comes from external debt. If such a statement is permissible, there is no shame in this. Anyone who points to rising debt should also acknowledge that the GDP of the Republic of Uzbekistan has now reached \$115 billion,” Kuchkarov stated.

What did the state spend on last year?

In 2024, consolidated budget revenues amounted to 381.4 trillion soums, and expenditures amounted to 429.3 trillion soums, with a consolidated budget deficit of 47.8 trillion soums.

According to Minister Kuchkarov, 50 percent of state budget expenditures were directed to the social sphere, with 72 percent of social expenditures, or 109 trillion soums, spent on education, healthcare, and science. According to him, the amount of funds allocated to the sector to support reforms in the field of general education has increased by almost 12 trillion soums over the past 3 years, reaching 45 trillion soums. 979 billion soums were allocated to encourage teachers with foreign and national certificates; 11 billion soums were paid to 500 foreign teachers who were attracted to popularize foreign languages.

The funds allocated for the healthcare sector amounted to 36 trillion soums, and the funds allocated for social support of the population amounted to 15 trillion soums. In addition, 902 billion soums were allocated to cover part of the interest payments on mortgage loans received by more than 65 thousand citizens.

Last year, 11 trillion soums were allocated from the budget for the agriculture and water management sector, while the amount of expenses for ecological and environmental protection measures amounted to 6.2 trillion soums.

During 2024, 28.5 trillion soums were allocated for centralized investment projects and expenses for the development of regional infrastructure.

According to the data, more than 1.7 thousand kilometers of drinking water and wastewater networks were laid with the funds allocated from the budget of 1.5 trillion soums. 3.5 trillion soums were allocated for road transport infrastructure, and 583 kilometers of highways, bridges and overpasses were built with these funds.

Jamshid Kuchkarov said in the report on the implementation of the state budget and the budgets of state special funds in 2024 that the funds allocated for the initiative budget exceeded 6 trillion soums.

It was reported that last year the revenues of local budgets were fulfilled by 105% compared to the forecast and amounted to 57 trillion soums, while their expenses amounted to 86.8 trillion soums. The revenues of the state trust funds amounted to 58.4 trillion soums, and the expenses amounted to 91.5 trillion soums, and about 35 trillion soums were allocated to the funds from the state budget.

According to Kuchkarov, when the World Bank assessed the effectiveness of public finance management in Uzbekistan based on public expenditure and financial accountability criteria, positive results were recorded in almost half - 16 out of 31 indicators.

Deficit from the first quarter: Preliminary budget report for 2025

As always, this time, expenses are higher than income. For example, in the first quarter of this year, consolidated budget revenues amounted to 97.2 trillion soums, and expenses - 113.8 trillion soums. The budget deficit amounted to 16.5 trillion soums, or 1 percent of the expected annual GDP. Since the beginning of the year, 46 percent of social spending has been allocated to education, while 9.3 trillion soums have been spent on healthcare.

Also, the amount of expenditures in the economic direction amounted to 10.4 trillion soums, of which 2 trillion soums were allocated to agriculture and water management, and 913 billion soums to ecology and nature protection.

According to the Minister of Economy and Finance, in the first quarter, local budget revenues exceeded the forecast by 110 percent and amounted to 15.7 trillion soums, while expenditures exceeded the forecast by 7 trillion soums.

There are three more quarters ahead, and by the end of the year, the budget deficit and debt may increase.