Fitch Confirms Tashkent’s Credit Rating at “BB-” with Stable Outlook

Tashkent, Uzbekistan (UzDaily.com) — International credit rating agency Fitch Ratings has confirmed Tashkent’s long-term issuer default ratings (IDR) in foreign and local currency at “BB-” with a stable outlook.

The rating reflects the capital’s solid financial position, low debt burden, and moderate risks associated with reporting transparency and dependence on the central government.

According to Fitch, Tashkent’s financial indicators are expected to remain consistent with the current rating: the debt repayment ratio is projected below 9x by 2029, and the overall debt load under 100%. The city’s standalone credit profile (SCP) is confirmed at “bb-,” corresponding to a “Weaker” risk assessment and a “very strong” (aa) financial profile.

Fitch notes that the city’s revenue base remains volatile due to frequent changes in tax regulation and significant reliance on central government transfers. In 2024, taxes accounted for 56% of Tashkent’s operating revenues, with state transfers contributing an additional 30%. Revenue-raising capacity is limited due to low fiscal autonomy and the fact that most tax sources are near their potential.

Expenditure flexibility is also constrained, as more than 80% of the budget goes to mandatory items, including wages and social payments, which are sensitive to inflation averaging 12% in 2020–2024. By the end of 2024, the city’s liquidity reserves stood at 770.7 billion soums, but these funds are largely earmarked and not freely available. Fitch highlights weak debt and liquidity management systems and limited access to domestic capital markets.

Despite these limitations, Tashkent’s financial profile is rated “aa” due to low debt levels and a stable operating balance. Fitch projects that in 2025–2029, the average annual operating balance will reach 1.411 trillion soums, with revenues growing to 14.7 trillion soums by 2029, implying an average annual revenue growth of 10.3% and expenditures at 10.5%.

Tashkent’s ratings remain one notch below Uzbekistan’s sovereign rating (BB/Stable) due to asymmetric risks related to data disclosure and the quality of reporting for government-related enterprises (GREs). Fitch assigned the city an ESG Relevance Score of 5 for “data quality and transparency,” indicating a significant impact on the credit profile.

The short-term rating in foreign currency is confirmed at “B,” with Fitch citing Yerevan (Armenia) and Konya (Turkey) as comparables. Tashkent’s rating is higher than Balıkesir (Turkey) but lower than Almaty (Kazakhstan).

Fitch noted that improvements in reporting transparency and reducing the debt ratio below 6x could support a rating upgrade, whereas an increase above 8x could lead to a downward revision of the outlook.