S&P: Falling gold prices could deprive Uzbekistan of approximately 1% of GDP in revenues

S&P: Uzbekistan May Lose About 1% of GDP Due to Falling Gold Prices

According to estimates by the international rating agency S&P Global Ratings, a decline in global gold prices between 2027 and 2028 could lead to a reduction in Uzbekistan's current account foreign exchange earnings by approximately 1% of GDP. Roman Rybalkin, Director of S&P Global Ratings, announced this on August 24 at the Silk Road Finance & Technology Forum in Tashkent.

Rybalkin noted that in recent years, Central Asian countries have benefited from a number of favorable cyclical factors, including high gold prices and significant external revenues. "We have seen higher gold prices and very significant revenue inflows, which have supported current account deficits. And the main question is that this will not continue forever," he emphasized.

The S&P representative also noted a possible deterioration in the labor markets of countries where labor income and remittances originate. "Furthermore, we are already seeing the first signs that certain problems are beginning to accumulate there," Rybalkin added.

Rybalkin placed particular emphasis on the risks associated with a potential decline in global gold prices, which is of great importance for Uzbekistan, both in terms of its external balance and government revenues. "We forecast a decline in gold prices, and this is a very important factor for Uzbekistan in terms of the current account. Our assumptions indicate that in 2027–2028, gold price dynamics could create a negative effect of approximately 1% of GDP in terms of current account revenues," said the director of S&P Global Ratings.

According to him, changes in the gold price also significantly impact the state's budget revenues. "A rough estimate is that a price change of approximately $500 translates into slightly less than $1 billion in government revenues—through taxes, mining company dividends, and other revenues. Therefore, this will obviously be a restraining factor," Roman Rybalkin explained.

Other external risks he cited included rising fuel and food prices, as well as climatic factors related to precipitation. The latter, he noted, could impact hydroelectric power generation in countries in the region, particularly Tajikistan and Kyrgyzstan. Uzbekistan, in turn, plans to import significant volumes of electricity from large hydroelectric power plants under construction in neighboring countries.

"These are factors we are concerned about when assessing the creditworthiness of countries in the region," concluded the S&P Global Ratings representative.

Gold plays a key role in Uzbekistan's economy, being a major export commodity and source of foreign exchange earnings. In some years, the precious metal accounted for a significant share of the country's exports, and revenues from its sales helped cover the trade deficit and maintain the balance of payments.

Furthermore, gold is a strategic asset: its reserves form a significant portion of the Central Bank's international reserves and support the stability of the national currency and financial system. Thanks to its large deposits and production volumes, including through the Navoi Mining and Metallurgical Combine, Uzbekistan remains a significant player in the global gold market.

In 2025, additional revenue from gold trading also became a significant source of tax revenue. As a result, the government increased spending by 41.2 trillion soums, or $3.43 billion.