IMF Executive Board Concludes 2026 Article IV Consultation with the Republic of Uzbekistan

(June 18, 2026)

·         Uzbekistan’s economy has continued to perform strongly, with robust economic growth, gradually moderating inflation, improving fiscal and external balances, and ample international reserves.

·         The outlook remains positive. Downside risks include a deterioration in global conditions and potential overheating pressures, while faster reform implementation provides upside.

·         Policy priorities are to contain demand pressures, safeguard macro-financial stability, and accelerate reforms that strengthen the economy’s productive capacity and foster private-sector-led, sustainable growth.

Washington, DC: On June 12, 2026, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV Consultation for the Republic of Uzbekistan[1] and considered and endorsed the Staff Appraisal on a lapse-of-time basis without a meeting.[2] The authorities have consented to the publication of the Staff Report prepared for this consultation.[3]

Uzbekistan’s macroeconomic performance has remained solid. Real GDP expanded by a strong 7.7 percent in 2025, underpinned by robust domestic demand, and growth accelerated further to 8.7 percent year-on-year (y/y) in the first quarter of 2026. Unemployment and poverty declined further, while inflation has continued to ease from the elevated levels following the May 2024 energy price reform, falling to 7.0 percent y/y in April 2026. The consolidated fiscal deficit narrowed to 2.1 percent in 2025, supported by buoyant economic activity and high gold prices. The latter, together with strong remittances and non-gold exports, contributed to a further reduction in the current account deficit to 3.9 percent of GDP. International reserves have remained ample.

The baseline economic outlook remains favorable, with limited spillovers from the ongoing war in the Middle East observed so far. Real GDP growth is projected at about 6.8 percent in 2026 and 6 percent in 2027, supported by strong private consumption, investment, and sustained progress with structural reforms. These reforms, combined with a continued tight monetary stance, are expected to further reduce inflation, bringing it to the Central Bank of Uzbekistan’s (CBU) 5 percent target by end-2027. The current account deficit is foreseen to narrow further to 3.2 percent of GDP in 2026, supported by higher gold prices. International reserves are projected to remain at comfortable levels, exceeding twelve months of imports by end-2026.

Uncertainty around the outlook remains elevated. Downside risks stem primarily from a weaker global environment—associated with heightened geopolitical tensions—which could dampen external demand, lower export prices, and tighten international financial conditions. Domestic risks include pressures for procyclical fiscal spending, the continued use of directed and preferential lending, and delays in addressing structural bottlenecks. Upside risks include faster‑than‑expected implementation of structural reforms.

Executive Board Assessment

In concluding the 2026 Article IV consultation with the Republic of Uzbekistan, Executive Directors endorsed staff's appraisal, as follows:

Uzbekistan’s economy continues to perform strongly. Growth has remained buoyant, supported by the authorities’ efforts to transform the economy and advance market‑oriented reforms; fiscal and external positions have improved further, and inflation has been on a downward trend. At the same time, economic activity is likely running above potential amid strong domestic demand, and global uncertainty and risks loom large. This underscores the importance of prudently managing the current juncture while advancing supply‑side reforms to sustain durable and inclusive growth.

Fiscal policy should prioritize limiting overheating risks and rebuilding buffers. It should avoid adding to demand pressures in 2026, particularly in the context of likely revenue overperformance. Containing within‑year expenditure adjustments would help support disinflation and reinforce policy credibility. Looking ahead, enhancing the fiscal framework to better insulate spending from volatile mineral revenues would strengthen macroeconomic stabilization and intertemporal discipline. Introducing a complementary operational anchor—such as a ceiling on the non‑mineral primary deficit—would help address procyclicality while preserving flexibility to respond to genuine spending needs.

Sustained progress on revenue mobilization and fiscal institutions remains essential to meet Uzbekistan’s large development needs. Increasing specific excise taxes, reducing exemptions and tax holidays, and strengthening tax and customs administration would help reverse the decline in the tax‑to‑GDP ratio over recent years. In parallel, further upgrades to medium‑term budgeting, public investment management, treasury operations, and fiscal risk oversight—especially for SOEs and PPPs—would improve spending quality, efficiency, and transparency.

Monetary policy should remain firmly oriented toward durably anchoring inflation at the CBU’s target. With domestic demand still strong, the output gap likely positive, and potential inflationary pressures stemming from the Middle East war, maintaining a sufficiently restrictive stance is warranted, with readiness to tighten further if disinflation stalls. Preserving the recent increase in exchange rate flexibility is critical to shock absorption, international reserve protection, and the effective functioning of the inflation-targeting framework. Continued efforts to deepen FX markets, strengthen liquidity management, and phase out directed and preferential lending would enhance monetary transmission over time.

Safeguarding financial stability in a rapidly evolving economy requires decisive implementation of the FSAP recommendations. Progress to date on capital buffers, borrower‑based measures, and supervisory frameworks is welcome, but momentum needs to be sustained. Accelerating the restructuring and privatization of SOCBs, strengthening asset quality recognition, and safeguarding central bank autonomy are central to improving resource allocation and limiting fiscal risks. Financial inclusion initiatives should rely on competition, transparency, and sound risk management, rather than directed and preferential lending and administrative controls that could weaken balance sheets.

Reducing the state’s footprint and strengthening market institutions remain key to lifting productivity and private‑sector dynamism. Advancing SOE reform—through privatization where feasible and stronger governance where state ownership remains—would help level the playing field and crowd in private investment. Accelerating governance reforms, including the adoption and effective implementation of whistleblower protection and asset declaration frameworks, would enhance accountability and investor confidence. Further strengthening competition policy, operationalizing sector regulators, and completing WTO accession would support market efficiency and export diversification.

Continued reform of labor markets and climate‑related policies will be important to sustain inclusive growth and resilience. Addressing structural impediments to labor force participation—particularly among women and youth—alongside tackling skill mismatches and reducing informality would help meet the economy’s growing labor demand. Better integration of climate considerations into public investment planning would improve energy efficiency and resilience while supporting decarbonization objectives.

Data are broadly adequate for surveillance, but further improvements are needed. Applying institutional sectorization consistently across macroeconomic datasets, producing quarterly GDP, and aligning financial soundness indicators with international standards would strengthen policy analysis and transparency. The authorities’ strong commitment to statistical modernization, supported by continued capacity development, is encouraging.

Uzbekistan: Selected Economic Indicators 2023-2027

Sources: Country authorities; and IMF staff estimates.

1/ Incorporates the November 2025 revision to national accounts data.

2/ Adjusted fiscal data are budget data adjusted for financing operations, such as equity injections and policy lending.

3/ The coverage of government social loan programs was expanded in the 2026 budget resulting in larger adjustments to consolidated revenue and expenditure and higher net lending.

[1] Under Article IV of the IMF's Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

[2] The Executive Board takes decisions under its lapse-of time procedure when the Board agrees that a proposal can be considered without convening formal discussions.

[3] Under the IMF's Articles of Agreement, publication of documents that pertain to member countries is voluntary and requires the member consent. The staff report will be shortly published on the www.imf.org/Uzbekistan page.