In March of this year, Uzbekistan made headlines as the largest seller of gold in the world, selling eleven tons of the strategic asset. This move was strategic in maintaining reserves amidst increasing government debt and a state budget deficit.
Uzbekistan has been steadily increasing its gold production, with plans to produce 150 tons per year, ensuring reserves for the future. According to Uzbekistan’s Central Bank, as of May 1, foreign exchange reserves totaled $34.2 billion, with $26.5 billion in gold. The country’s financial safety cushion decreased by $1.2 billion from 2022 to 2023, highlighting the importance of gold reserves in difficult economic conditions.
Although Uzbekistan’s reliance on gold exports has helped in the short term, analysts warn that it is not a sustainable long-term solution. There is a need to focus on developing industrial production, services, and exporting goods with higher added value to diversify the economy. The growing dependence on gold is indicative of underlying economic issues in the country that need to be addressed for long-term stability.
President Mirziyoyev’s economic reforms have attracted foreign investors but have also led to an increase in external debt, reaching $31.7 billion by the end of 2023. This represents 35.1% of the country’s GDP, doubling in the past five years. Under Uzbekistan’s first president, Islam Karimov, external debt ranged between 10-15%. The continued reliance on gold exports highlights the need for further economic diversification to ensure the country’s future prosperity.
An independent economist in Tashkent, Yuli Yusupov, acknowledged
