Tashkent, Uzbekistan (UzDaily.com) -- The credit-rating agency of Belgium Credendo has dramatically improved its assessment of the political and economic situation in Uzbekistan, Dunyo news agency reported.

As noted in a press release from the Agency, the ambitious economic reforms undertaken by current President Shavkat Mirziyoyev are underway. One aspect of his reform plan was to improve the quality and transparency of macroeconomic data.

As a result, the figures of Uzbekistan’s gross foreign exchange reserves are now published by the IMF in its International Financial Statistics (IFS).

These newly published figures show that gross foreign exchange reserves (excluding gold) cover about six months of imports, a comfortable level that led Credendo to upgrade its short-term political risk to category 3/7. This classification reflects the liquidity of a country.

That being said, reforms also have pitfalls. Among other things, the liberalisation of the exchange rate and of the trade regime in 2017, along with the large credit growth, led to a sharp deterioration of the current account balance.

Indeed, while the country posted a current account surplus of 2.5% of GDP in 2017, the balance turned into a deficit of about 7% of GDP in 2018 and is likely to remain in deficit this year.

Looking ahead, the deterioration of the external balance – partly driven by a large credit expansion – is a factor to watch, as it could lead to a weakening of the liquidity and a boom-and-bust scenario.