ADB Keeps Uzbekistan Growth at 6.7% Amid Central Asian Slowdown
The Asian Development Bank has maintained its 2026 economic growth forecast for Uzbekistan at 6.7% despite downgrading expectations for the wider region. The July Asian Development Outlook report also held the nation’s 2027 gross domestic product projection steady at 6.8%.
Inflation projections for the country remain unchanged at 6.5% for 2026 and 5.0% for 2027. This stability contrasts with the broader Caucasus and Central and West Asia territory, which saw its 2026 growth outlook lowered to 3.8% and its inflation forecast surge to 22.0%. Across the wider developing Asia and the Pacific region, the bank lowered the overall 2026 growth forecast to 4.9%. The ADB attributed the regional slowdown to prolonged disruptions in global energy markets and supply chains caused by the Middle East conflict.
The bank noted that downside risks to the broader regional outlook remain significant. A renewed escalation in the Middle East could tighten energy markets further, raise risk premiums and intensify imported inflation across developing Asia. Additionally, tighter global financial conditions or a sharp correction in equity markets could raise debt-servicing costs and put pressure on regional currencies.
Fiscal risks loom over fossil fuel subsidies
While headline economic figures appear resilient, Uzbekistan faces substantial fiscal exposure due to its heavy reliance on fossil fuel subsidies. In 2024, explicit state support for fossil fuels amounted to approximately 12% of the country’s gross domestic product. Natural gas represented the largest share of this financial commitment, followed by petroleum and electricity.
The report warns that elevated international energy prices could significantly increase these costs. The bank forecasts crude oil prices averaging $87 per barrel and natural gas prices at $24 per mln British thermal units in 2026.
Simulation parameters suggest that these higher natural gas prices could drive the sector’s fiscal burden to over 13.0% of GDP by the end of the year. The institution cautioned that such blanket subsidies, while offering immediate relief to consumers, are often regressive and fiscally costly during prolonged periods of elevated global prices.
Domestic resilience and agricultural protection
To mitigate these pressures, the development bank recommended transitioning to targeted cash transfers and energy conservation initiatives. These alternatives protect vulnerable populations without compromising long-term fiscal sustainability. Meanwhile, monetary policy expectations for Uzbekistan in 2026 and 2027 have adjusted upward as regional central banks navigate challenging growth and inflation trade-offs.
Despite energy sector challenges, the country has demonstrated strong resilience against external agricultural shocks. The ADB highlighted that Uzbekistan remains fully self-sufficient in nitrogen fertiliser production, maintaining a ratio above 100%.
This robust domestic capacity shields the national agricultural sector from the extreme volatility of global fertiliser markets and international shipping delays that have severely impacted food production in other developing Asian economies.
