TOPIC OF THE WEEK: Uzbekistan—Can the boom pay for itself?
While I recently derived econometrically that the Uzbek economy may not necessarily be overheating, the key question of whether it can keep growing this fast without becoming increasingly dependent on foreign financing is still a valid one to ask. After all, while the economy is expanding rapidly, it is also importing heavily. Hence, I want to understand three particular issues:
What is it buying? Machinery and equipment that will expand the production possibility frontier and future exports, or mainly goods to meet current consumption?
How is it paying? Through export earnings, money sent home by workers, foreign investment or additional borrowing?
Will that spending pay off? Will the new factories and infrastructure generate enough additional income—and foreign currency—to cover future imports and debt repayments?
Ultimately, I am trying to answer the question whether today’s rapid growth is building the capacity to sustain tomorrow’s growth, or whether the financing constraints will eventually force slower growth, tighter policy or a weaker soum. The evidence offers some hope but cannot be deemed conclusive. For example, during January–August 2026, non-gold exports including services rose 30.8% YoY, substantially faster than imports (16.3%), lifting their coverage of the import bill from 51.6% to 58.1%. However, the absolute non-gold trade deficit remained broadly unchanged at about US$14.5bn. Uzbekistan's ability to sustain rapid growth without becoming increasingly dependent on external financing therefore remains unproven.
The nature of Uzbekistan’s boom then supports confidence in sovereign dollar-bond repayments, while soum-bond returns still remain vulnerable to currency depreciation.
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