TASHKENT, Uzbekistan, May 27. S&P Global, an international rating agency, highlights that Uzbekistan's economy continues to navigate the spillover effects from the Russian-Ukrainian war relatively well.
Data obtained by Trend from the agency shows that remittance inflows increased by 30 percent to $14.8 billion (13 percent of GDP) in 2024, following a significant decline in 2023. This surge in remittances reflects rising demand for labor in Russia, along with higher wages, and also demonstrates growing diversification in remittance sources, including from the U.S., Germany, Poland, and South Korea.
However, 77 percent of Uzbekistan's total remittances in 2024 still originated from Russia. Additionally, trade between Uzbekistan and Russia increased by about 15 percent, reaching $11.6 billion in 2024. Due to Western-led sanctions on Russia, Uzbekistan has been able to increase its exports to meet growing demand. In October 2023, Uzbekistan also signed a two-year agreement with Russia’s Gazprom to import nine million cubic meters of gas per day. While a potential ceasefire between Russia and Ukraine could affect trade and capital flows with Russia, the economic impact on Uzbekistan is expected to remain manageable.
Although the Uzbek government is striving to comply with international sanctions, there remains a risk that the U.S. and EU could impose secondary sanctions on Uzbek companies doing business with Russia. For instance, the U.S. and EU have already sanctioned several private Uzbek companies involved in trading electronics, telecommunications equipment, and goods in the defense sector. In response, the government is strengthening its due diligence processes, implementing automated screening measures, and conducting stress tests to mitigate these risks.
