Uzbekistan 2026: China, Gold and Digitalization

Tashkent, Uzbekistan (UzDaily.com) —  In 2026, Uzbekistan remains the center of economic and strategic dynamics in Central Asia, balancing between major foreign investors, resource opportunities and domestic reforms, according to the Forvis Mazars Central Asia Outlook 2026: Geopolitics, Markets and Strategic Risks.

China maintains dominant influence through investment, infrastructure and technology projects, forming significant economic ties while simultaneously deepening the country's structural dependence.

Russia remains an important trade and migration partner, sustaining domestic demand and foreign currency inflows, while the United States provides strategic cooperation in the uranium sector and high-technology investment, yet retains significant control over visa flows and diplomatic mechanisms.

Against a backdrop of external political and financial factors, Uzbekistan faces internal challenges: water and energy deficits, demographic pressure and inflationary risks.

At the same time, digitalization and the development of an IT ecosystem are creating opportunities for institutional transformation, the formation of new sources of foreign currency earnings and a reduction in dependence on commodity factors, laying the groundwork for the long-term resilience of the economy.

Below is the Forvis Mazars overview of Uzbekistan.

China: Investment and Trade Dominance

China holds the leading position in Uzbekistan in terms of foreign direct investment and loans — US$10 billion over the first nine months of 2025 — giving Beijing significant leverage over key sectors of the economy. More than 30 energy projects with a combined capacity of nearly 10 GW and a total value exceeding US$9 billion are being developed with Chinese participation, alongside an additional 14 projects worth nearly US$2 billion. Substantial attention is directed toward infrastructure, including the Kashgar–Torugart–Andijan railway corridor capable of transporting up to 12 million tons of cargo annually, reinforcing Uzbekistan's role as a critical transit hub. China is also actively advancing technology cooperation through the China–Uzbekistan Science and Technology Park in the Syrdarya region and Digital Silk Road initiatives, creating conditions for economic digital transformation while deepening the country's structural dependence on external capital and technology.

China also ranks first in trade with Uzbekistan, with the balance heavily skewed toward imports — US$2 billion in exports versus US$13 billion in imports over the first 11 months of 2025. A significant portion of imports consists of industrial goods, equipment, technology solutions and consumer products. The negative trade balance creates a one-sided dependency, leaving the country vulnerable to external price fluctuations, demand shifts and Beijing's policy decisions.

China's investment presence in Uzbekistan has reached an unprecedented scale: as of January 1, 2026, 5,044 companies with Chinese capital were operating in the country, including 748 joint ventures and 4,296 subsidiaries — their number having grown by 1.5 times in the space of a single year. More than US$15 billion in Chinese direct investment is planned, while the combined portfolio of joint projects is estimated at nearly US$90 billion.

Summary

China maintains dominant influence over Uzbekistan's economy through investment, infrastructure and technology projects. The one-sided trade balance and dependence on Chinese loans introduce potential economic risks. The concentration of external capital flows and technology makes the country's economy sensitive to foreign policy and financial decisions.

Russia: Trade and Migration Flows

Russia remains one of Uzbekistan's key trading partners, particularly for exports of agricultural produce, mineral resources, textiles and light industry. The agricultural sector is critically important for employment, providing jobs for millions of citizens and sustaining domestic demand. Trade with Russia continues to grow year on year despite sanctions constraints and global economic fluctuations, making Russia a vital destination for Uzbek producers.

Russia is simultaneously the main source of remittances to Uzbekistan, accounting for approximately 78 percent of all international inflows in the first half of 2025, totaling US$8.2 billion. Migrant remittances remain a key source of cash inflows, supporting household incomes and the stability of the national currency. However, tightening migration policies and anti-migration crackdowns create the risk of a decline in these flows, which could significantly affect the economy and domestic demand.

Summary

Russia remains an important trading partner, particularly for agricultural goods critical to employment and domestic demand. Remittances from Russia continue to represent a substantial share of the country's foreign currency, though tightening migration policy creates uncertainty.

United States: Investment, Uranium and Diplomatic Leverage

In early 2025, U.S. President Donald Trump received the leaders of all five Central Asian states, including Uzbekistan, at the White House. The American side announced what it described as an "incredible trade and economic deal" envisaging investments of nearly US$35 billion over three years and more than US$100 billion over ten years in key sectors of the U.S. economy, including aviation, agriculture and information technology.

Uzbekistan ranks among the world's leading uranium producers and, together with Kazakhstan, accounts for more than half of global output. Uranium supplies are of critical importance to the United States, which actively purchases the material from Russia but is seeking to diversify its sources. For Tashkent, this creates an opportunity to increase exports of strategic raw materials and to expand energy-sector cooperation with Washington.

As part of efforts to strengthen diplomatic ties, Uzbekistan plans to open three new consulates in the United States and to introduce a visa-free regime for American citizens starting in 2026, intended to stimulate tourism and investment. At the same time, U.S. authorities continue to restrict visa issuance and are actively deporting Uzbek nationals, underscoring Washington's full control over the nature of the bilateral relationship. This compels Tashkent to operate within a multi-vector foreign policy framework, balancing the need to attract capital against the imperative of preserving sovereignty over foreign policy decisions.

Summary

The relationship with the United States shapes an important foreign policy and economic contour, encompassing investment agreements and uranium export opportunities. At the same time, visa restrictions and deportations demonstrate a high degree of American control. The economic and diplomatic environment requires Uzbekistan to balance opportunities and constraints within a multi-vector foreign policy.

Developments Around Iran: Gold as a Buffer and the Southern Corridor as an Alternative

Geopolitical escalation around Iran is amplifying volatility across commodity and transport markets, creating simultaneous risks and opportunities for Uzbekistan. Military crises traditionally strengthen gold's position as a safe-haven asset, driving up world prices. For Uzbekistan, this is of fundamental importance: gold exports remain one of the key sources of foreign currency earnings and a factor underpinning macroeconomic stability. Rising prices support the balance of payments, gold and foreign exchange reserves and the government's fiscal capacity, partially offsetting external shocks.

At the same time, disruptions to shipping through the Strait of Hormuz could trigger a rise in world oil prices. For Uzbekistan, which remains dependent on imports of oil and petroleum products, this would mean increased costs across industry, transport and energy. An additional inflationary impulse feeds through from China — one of the country's main trading partners — as higher energy costs push up production costs for Chinese goods, translating into higher import prices on Uzbekistan's domestic market. Against a backdrop of active modernization and an ongoing investment cycle, this intensifies pressure on inflation and real household incomes.

Iran also retains importance as an export destination and as an element of the southern logistics architecture. Developing routes through Iran gives Uzbekistan access to ports on the Persian Gulf and the Indian Ocean, forming an alternative to traditional transit corridors via Russia. In the event of political or transport infrastructure destabilization in Iran, insurance and logistics costs would rise; however, in a strategic time horizon, route diversification remains an important tool for reducing transit dependence and expanding the country's foreign trade opportunities.

Summary

The Iranian dimension creates a dual macroeconomic effect for Uzbekistan. On the one hand, military escalation strengthens the position of gold and supports the country's export revenues, providing a foreign currency buffer of resilience. On the other hand, rising oil prices and more expensive imports through the Chinese and energy channels intensify inflationary pressure and raise the cost of doing business. Strategically, the southern corridor through Iran remains an important alternative to traditional routes, but its effectiveness depends directly on the level of regional security and the sanctions configuration.

Demographic Window of Opportunity: Market Scale and Pressure on Institutions

Uzbekistan remains one of the most demographically dynamic countries in the region. Its population exceeds 38 million and continues to grow on the back of a high birth rate — 3.2 births per woman over a lifetime — which sustainably exceeds the replacement level of 2.1 births, forming the largest domestic market in Central Asia. In the context of a global workforce contraction, this gives the country a unique demographic window of opportunity: an expanding domestic consumer market and a steady influx of young workers into the economy.

The young age structure creates potential for accelerated employment growth in industry, construction, services and the digital sector. At the same time, pressure on the education system, healthcare, infrastructure and the labor market is intensifying. The annual entry of a large number of young people into the workforce requires large-scale job creation and improvements in the quality of vocational training; without this, the risk of hidden unemployment and external labor migration grows.

Summary

For Uzbekistan, demographics represent a strategic opportunity to accelerate modernization and strengthen the domestic market. However, realizing this potential depends on the economy's ability to create quality jobs and build human capital, converting quantitative population growth into a sustainable competitive advantage.

Water Resources and Agriculture: Systemic Vulnerability

Agriculture plays a key role in Uzbekistan's economy, providing employment for the growing population and sustaining domestic demand. Intensive construction of residential and commercial developments is increasing the load on the energy system, heightening demands on water and energy resources. The energy burden on infrastructure is growing, and ensuring the supply of electricity and gas to the population is becoming an increasingly critical factor for the country's stability.

The heavy dependence of the economy and the agricultural sector on water resources from the Amu Darya and Syr Darya rivers makes Uzbekistan vulnerable to changes in the hydrological situation in neighboring countries — Tajikistan, Kyrgyzstan and Afghanistan. Afghanistan is constructing numerous canals and irrigation projects, including the large-scale Qosh Tepa Canal, approximately 285 kilometers in length, designed to irrigate more than 500,000 hectares. The diversion of water from the upper reaches of the Amu Darya poses systemic risks to Uzbekistan's water balance, including a reduction in resources available for irrigating agricultural land.

This creates direct threats to crop yields, energy generation and food security, particularly in the country's southern regions. Water shortages could lead to a decline in agricultural efficiency, rising food prices and increased strain on thermal and hydroelectric power stations.

Available environmental monitoring data indicates a decline in water levels in the Surkhandarya canals, negatively affecting agricultural output. Uzbekistan's Ministry of Energy notes that hydropower generation has fallen by approximately 35 percent due to insufficient water resources, limiting generation capacity and increasing the load on thermal plants.

Summary

Agriculture and energy in the country are critically dependent on the water resources of the Amu Darya and Syr Darya, as well as on the external management of water flows in neighboring countries. Projects in Afghanistan, Tajikistan and Kyrgyzstan create long-term systemic risks to the water balance. Changes in water volumes directly affect food security, energy generation and the resilience of the regional economy.

Gold: Strategic Resource and Economic Backbone

The Muruntau deposit, located in the Navoi region, remains Uzbekistan's key strategic asset. Recoverable reserves are estimated at 150 million troy ounces (approximately 4,500 metric tons), and production since the start of commercial exploitation has exceeded 1,200 metric tons. In 2025, gold exports reached approximately US$9.8–9.9 billion, accounting for around 37 percent of the country's merchandise exports and forming a critically important source of foreign currency inflows.

Forecasts from leading analytics institutions point to rising gold prices in 2026: JPMorgan projects prices will reach US$6,300 per troy ounce by the end of 2026, while Deutsche Bank has affirmed its gold price target of US$6,000. High prices are opening new export and investment opportunities, while simultaneously requiring strategic management of extraction volumes to avoid market overheating.

Gold exports exert a multi-dimensional effect on the country's economy. They reinforce foreign exchange reserves, contribute to financial stability and support domestic demand. Major national gold mining companies, including the Navoi Mining and Metallurgical Company, feature in global rankings and attract investors, creating jobs and sustaining infrastructure in mining regions.

Summary

The Muruntau deposit remains the key source of foreign currency receipts and export revenues for the country. The projected rise in world gold prices reinforces the strategic importance of the sector. The high share of gold in international reserves and exports creates financial stability and strengthens Uzbekistan's macroeconomic standing.

Energy Sector: Deficit and Alternative Sources

Residents of Tashkent face regular power outages and gas shortages, particularly during peak hours. The problem is compounded by rising energy consumption driven by the construction of residential and commercial facilities. Restrictions on gas refueling and rolling blackout schedules indicate that the energy system is operating at its limits, with generation capacity constrained.

The root causes of the deficit stem from a decline in domestic gas production, which fell by 4.8 percent in 2025 to 35.5 billion cubic meters. At the same time, the country is actively importing gas from Russia and Turkmenistan, while Uzbek gas exports rose by 5.1 percent and are directed primarily to China. A decline in hydropower output is also increasing the load on thermal plants, creating additional strain on the energy system.

In response to energy challenges, alternative sources are being developed. Since the start of 2025, solar and wind power plants have generated more than 16 billion kWh. Leading projects are being built with the involvement of international investors — ACWA Power (Saudi Arabia), Voltalia (France), Sumitomo and Shikoku (Japan), and China Huadian (China) — with support from the World Bank Group, EBRD and ADB. Hybrid systems with storage units and green hydrogen projects are improving grid resilience and laying the groundwork for further decarbonization of the economy.

Summary

Electricity and gas shortages remain a critical problem, compounded by rising energy consumption and urbanization. The development of solar, wind and hybrid sources is partially relieving pressure on traditional grids and improving the overall reliability of the energy system. Current changes point to a gradual shift in the generation mix toward more sustainable and diversified energy sources.

Uzbekistan's Digitalization: From a Fintech Surge to Institutional Transformation

The country's first national unicorn — IT holding company Uzum — raised US$70 million from Tencent and VR Capital in August 2025, lifting its valuation from US$1.1 billion to US$1.5 billion. This case reflects not only the growth of the domestic fintech and e-commerce market but also the institutional maturity of an ecosystem capable of simultaneously attracting capital from both China and the United States. In parallel, the number of IT Park residents reached 3,000, forming a critical mass of export-oriented IT companies and reinforcing the role of digital services as a new source of foreign currency earnings.

The approval of a national artificial intelligence development strategy through 2030 sets the framework for the digital transformation of the financial sector and public administration. A decline in the share of cash in the economy — the M0-to-GDP ratio fell from 4.29 percent to 3.55 percent — and legislative restrictions on cash transactions are stimulating the shift to non-cash operations, broadening transparency and the tax base. The development of public service centers, the Unified Portal and the Digital Government system has enabled the number of government services to grow from 444 to 1,040, with their combined volume exceeding 55 million transactions. By 2030, the plan is to increase the number of services to 1,500, bring the share of online services to 95 percent, transfer an additional 250 services to digital format in the near term, and launch a Paperless Government model.

A key vector of institutional digitalization is the reform of the public procurement system. A presidential decree on additional measures to ensure a competitive environment envisages the introduction of an AI module for the automatic calculation of market prices on a dedicated portal starting March 1, 2026. The formation of the starting procurement price will be carried out exclusively through this algorithm, and deviations of more than 10 percent upward or more than 20 percent downward will automatically be flagged as "high risk" and subject to review. The strategy through 2030 sets a target of bringing the share of competitive procedures to 80 percent and achieving budget savings of 25 trillion soums.

Summary

Uzbekistan's digitalization is ceasing to be an auxiliary direction and is becoming an instrument of structural modernization. If the stated goals are achieved, the digital agenda has the potential to improve institutional transparency, reduce transaction costs and generate new points of export growth, reducing the economy's dependence on traditional commodity and migration-driven factors.

Forvis Mazars is an international, independent, and integrated professional services firm providing audit, accounting, tax, and consulting services. The company possesses deep expertise in analyzing economic and geopolitical developments across Central Asian nations, including Kazakhstan, Uzbekistan, and Kyrgyzstan.

This report and analysis have been prepared by the Forvis Mazars Central Asia team based on comprehensive research of macroeconomic trends, investment flows, trade patterns, and geopolitical factors shaping regional development.

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