IMF Sees 7.7% Growth in Uzbekistan Economy for 2025

Tashkent, Uzbekistan (UzDaily.com) — The International Monetary Fund (IMF) has reported that Uzbekistan’s economy expanded by 7.7% in 2025 and has urged the authorities to maintain tighter monetary policy to contain inflationary pressures, according to its Article IV consultation staff report released on April 13, 2026.

Economic performance and outlook

According to the IMF assessment, Uzbekistan demonstrated strong economic resilience in 2025, with real GDP growth reaching 7.7%, driven by robust consumption and investment activity. Growth was broad-based, with particularly strong performance in services and construction sectors. The unemployment rate declined by 0.7 percentage points to 4.8%.

Inflation measured by the consumer price index slowed to 7.3% by the end of 2025, down from 9.8% a year earlier. The IMF attributed the disinflation trend to easing effects of energy price increases recorded in May 2024, a 6.9% appreciation of the Uzbek som against the US dollar, and sustained tight monetary policy. Core inflation also declined by 1.5 percentage points. The current account deficit narrowed to 3.9% of GDP, supported by strong exports of both commodity and non-commodity goods as well as significant remittance inflows. International reserves remained at a level equivalent to around 13 months of imports. The fiscal deficit stood at 2.1% of GDP, below the 3% target.

For 2026, the IMF projects GDP growth of 6.8%, supported by ongoing reforms, sustained investment activity, strong remittances, and higher gold prices. Growth is expected to moderate to around 6% in 2027 as domestic demand gradually softens. Inflation is projected to remain above the Central Bank of Uzbekistan’s 5% target in 2026, partly due to elevated global oil prices linked to conflict in the Middle East, before converging to target levels in 2027.

The IMF also highlighted downside risks, including heightened geopolitical tensions, trade disruptions, commodity price volatility, and global uncertainty. Domestic risks include potential pro-cyclical fiscal expansion, contingent liabilities from state-owned enterprises and state-owned commercial banks, and public-private partnership obligations.

Fiscal policy

The IMF welcomed the reduction in the budget deficit in 2025 and recommended avoiding additional expenditure increases during the 2026 budget execution. It cautioned that any revenue overperformance should not translate into higher spending, as this could intensify inflationary pressures. If support measures are needed due to external shocks, the IMF advised targeted assistance rather than broad subsidies or price controls.

Starting from the 2027 budget, IMF staff recommended introducing a ceiling on the non-resource primary deficit in addition to the existing 3% overall deficit target, to better manage volatility in resource revenues.

On taxation, the Fund noted a declining tax-to-GDP ratio since 2020 and recommended increasing excise taxes on selected goods, phasing out tax exemptions and reduced corporate tax rates, and eliminating customs duty exemptions, alongside continued tax and customs administration reforms.

Monetary policy

The IMF supported the Central Bank of Uzbekistan’s decision to keep the policy rate at 14% since March 2025, ensuring positive real interest rates. However, it warned that disinflation has slowed recently and core inflation rose to 6.3% as of February 2026. The Fund recommended further tightening if disinflation does not resume. It also supported greater exchange rate flexibility introduced in April 2025, saying it would improve the economy’s ability to absorb external shocks and support inflation targeting.

Financial sector

The IMF identified accelerating reforms and privatization of state-owned commercial banks as a key priority. It welcomed plans to extend asset quality reviews to all commercial banks and align non-performing loan assessments with international standards. At the same time, it warned that continued dominance of state-owned banks in quasi-fiscal activities poses risks to financial stability and may increase fiscal costs.

The Fund also recommended gradually phasing out directed lending programs, strengthening central bank independence, improving stress testing frameworks, and removing interest rate caps that limit access to finance.

Structural reforms

The IMF called for faster reform of state-owned enterprises, recommending privatization of viable firms in competitive sectors and liquidation of non-viable entities. It also emphasized that the success of the newly established National Investment Fund will depend on clear mandates and operational autonomy.

On governance, the IMF highlighted the need for whistleblower protection legislation and asset declaration requirements. Labor market reforms should address low female labor participation, high informal employment, and skills shortages. The Fund further urged deeper integration of climate objectives into public investment management and stronger antimonopoly enforcement, including progress on WTO accession-related reforms.