EME Macro/Strategy: Uzbekistan - riding the wave of investment and growth momentum

Uzbekistan stands out as the most compelling growth story in our WOOD coverage universe. Accelerating reforms, robust foreign direct investment (FDI) inflows, and a maturing policy mix are driving around 7.0% GDP growth in 2025E, and at least 6% in the coming years, while inflation is moving gradually towards 5%, amid ongoing price liberalisation. In our view, the authorities’ commitment to reducing the State’s footprint through privatisations is genuine, albeit it has not always worked as the authorities would have wished in the past. The IPO pipeline is ambitious and, in our view, we are currently on the brink of a breakthrough in its implementation. Nevertheless, institutional bottlenecks persist. First, we see a pressing need for fiscal reform to expand the tax base. Second, we highlight the medium-term need for the corporate sector to rely more on internal and FDI equity financing, rather than external borrowing. Lastly, while efforts to ensure a diversified energy supply, as the country becomes more of an energy importer, are positive, the projects’ implementation remains key.