In 2024, financial conditions in Uzbekistan eased and financial stability in the banking system was maintained. The decline in financial stress in the banking system, high capital adequacy ratios, and sufficient liquidity were identified as the main factors ensuring this stability.
Macroeconomic Stability
In 2024, GDP growth reached 6.5%, driven by strong domestic demand. At the same time, reduced pressure in the foreign exchange market and moderating inflation led to a positive shift in Uzbekistan’s Financial Conditions Index.
Developments in the Banking System
The capital adequacy ratio of banks remained at 17%, well above the minimum required level. The Liquidity Coverage Ratio (LCR) reached 194%, and the Net Stable Funding Ratio (NSFR) 115%. These positive indicators show that banks are resilient to risks.
Household Debt Burden
Lending to individuals continues to grow. At the same time, the rising debt burden in the household sector is becoming a concern: in 2024, the overall household debt service-to-income ratio (DSTI) stood at 34%, while 40% of total loans were issued to borrowers with a DSTI ratio above 50%.
Real Estate and Car Loan Markets
Activity in the housing market declined, while prices remained 17% above their fundamental values. Tightening of mortgage conditions also reflects caution in this market. At the same time, macroprudential measures helped reduce credit risks in the car loan segment.
Microdebt Market
Credit risk in the microdebt sector is increasing. The volume of microdebt loans to individuals in banks’ loan portfolios, as well as the number of such borrowers, is rising rapidly. The concentration level of microdebts to individuals is also continuing to rise.
Risks
The main risks to financial stability include the rising cost of external financing, rapid growth in microdebts, overvaluation of housing prices, and cyber security threats. According to stress test results under an adverse scenario, there is a possibility that capital adequacy could fall below the minimum requirement by 2027.
Medium-Term Outlook
To mitigate structural and cyclical systemic risks in the medium term, the introduction of a capital buffer for domestic systemically important banks and a countercyclical capital buffer is planned.
Timely macroprudential policy measures and systemic risk prevention mechanisms implemented by the Central Bank remain critical for ensuring financial stability.
The full report is available on the official website of the Central Bank.
