World Bank Raises Uzbekistan's 2026 Growth Forecast to 7.9% as Regional Economy Slows

A stronger forecast against a weaker regional outlook

The World Bank has raised its forecast for Uzbekistan's economic growth in 2026 to 7.9%, up from the 6.4% it projected in April. The revision of 1.5 percentage points puts Uzbekistan second among developing economies in Europe and Central Asia, behind Kyrgyzstan's projected 9.6% expansion.

The bank's October 6 economic update also raises Uzbekistan's 2027 forecast from 6.7% to 7.5%, with growth of 7.1% expected in 2028. These are forecasts, rather than recorded results. Uzbekistan's economy grew by 7.7% in 2025, compared with 6.7% in 2024.

The stronger Uzbek outlook contrasts with a regional slowdown. The World Bank's October economic update, titled Europe and Central Asia Economic Update: Making AI Work: Jobs, Firms, and Productivity, projects growth across the region's developing economies at 2.2% in 2026, down from 2.6% in 2025. Higher energy prices, geopolitical uncertainty and weaker growth among major trading partners are weighing on activity.

For Uzbekistan, rising wages, employment, household spending and investment are providing a stronger domestic engine. Record remittances are supporting incomes, while expanding trade with China and neighboring Central Asian countries is helping exports outside gold.

The distinction matters: Uzbekistan's forecast is among the region's highest, but it is not the highest in 2026. Its projected growth exceeds the regional rate by 5.7 percentage points and Central Asia's rate by 2.1 points. The bank expects Uzbekistan to take the leading regional position in 2027, when its growth is forecast at 7.5%.

Household spending and investment lead the expansion

The World Bank's Uzbekistan country overview identifies domestic demand as the main driver of the economy. Private consumption rose by 9.5% in real terms in 2025, while investment increased by 10.5%. Services, agriculture and industry all contributed to the 7.7% increase in gross domestic product.

Real growth means growth after allowing for price increases. The consumption figure therefore indicates that households bought more goods and services, rather than simply paying more for the same purchases. Higher wages and money sent home from abroad helped finance that increase.

Investment in infrastructure, energy and housing is also sustaining demand. Foreign sources, including direct investment and loans, financed more than 70% of total investment, according to the regional assessment. That figure should not be read as the share financed entirely by foreign direct investment: it includes borrowing as well.

The bank expects private consumption and investment to remain the main supports for growth in 2026. Its country outlook anticipates only a modest contribution from net exports and remittances as growth slows in Russia and China, Uzbekistan's principal trading partners. Net exports measure exports minus imports, so rising export sales do not necessarily add strongly to GDP if imports grow faster.

Record remittances carry a concentrated risk

Remittances to Uzbekistan reached $9.2 billion in the first half of 2026, a record for that period and an increase of 13% from a year earlier. About 70% came from Russia, equivalent to roughly $6.4 billion when that share is applied to the total.

Those transfers help households pay for everyday purchases and can support construction, education and small businesses. Their scale explains why spending in Uzbekistan can remain strong even while the broader regional economy loses momentum.

The same figures reveal a vulnerability. With approximately seven dollars in every ten coming from Russia, a weaker Russian economy could affect employment and earnings among people sending money home. The bank forecasts Russian growth of just 0.8% in 2026 and identifies weaker remittances as a risk to Uzbekistan's outlook.

Exports outside gold rise, but the measures differ

Uzbekistan's exports excluding gold increased by nearly 30%, supported by expanding sales to China and neighboring Central Asian economies. The regional assessment also describes a decline in total exports as gold shipments fell. A precise reference period and price basis for those figures are not specified in the published account, limiting direct comparison with annual trade data.

The World Bank's country overview gives a separate measure: total exports rose by 2.5% in real terms in 2025, while imports increased by 7.7%. Export activity included gold, copper, zinc, uranium, food, fertilizers and services. Purchases of energy, machinery and intermediate goods drove the increase in imports.

These figures describe different categories and periods. The nearly 30% increase excludes gold; the 2.5% figure covers total exports in 2025 after adjusting for prices. They cannot be treated as competing estimates of the same change.

The current account deficit narrowed from 4.7% of GDP in 2024 to 3.9% in 2025, an improvement of 0.8 percentage points. The current account records trade in goods and services alongside income and transfers, including remittances. The bank expects the deficit to widen in 2026 as more expensive energy increases Uzbekistan's import bill.

Central Asia leads despite slowing growth

Central Asia remains the fastest growing subregion in developing Europe and Central Asia, although its expansion is projected to slow from 7.1% in 2025 to 5.8% in 2026. The World Bank expects further easing to 5.4% in 2027 and 5.1% in 2028.

For 2026, the country forecasts place Kyrgyzstan at 9.6%, Uzbekistan at 7.9%, Tajikistan at 7.5% and Kazakhstan at 4.6%. Strong domestic demand and government investment in transport and energy continue to support the subregion. Major projects identified in the assessment include the railway connecting China, Kyrgyzstan and Uzbekistan, the Transcaspian transport corridor and the Rogun hydropower plant.

Russia accounts for about 40% of output across the wider developing Europe and Central Asia region, giving its weak expansion considerable weight in the regional average. Excluding Russia, growth is projected to fall from 3.7% in 2025 to 3% in 2026. Even on that basis, Uzbekistan's forecast is 4.9 percentage points higher.

Elsewhere, the Western Balkans are forecast to grow by 3.1%, up from 2.6% in 2025. Poland's projected expansion is 3.6%, while Ukraine's is 1.2% amid damage to critical infrastructure and disruptions to exports. Temporary government support has softened the effect of higher energy prices in some countries, but it has also increased pressure on public finances.

Inflation, debt and gold shape the financial outlook

The World Bank projects Uzbekistan's inflation at 7% in 2026, gradually approaching the 5% target by 2028. Public debt is expected to remain around 28% of GDP in 2026 and 2027. The regional assessment puts the 2026 budget deficit at 2.2% of GDP, with higher social and investment spending expected to be offset by revenue growth and reductions in energy subsidies and targeted lending to state enterprises.

International reserves reached $66.3 billion in January 2026, an increase of $25.1 billion from a year earlier. That implies reserves of $41.2 billion in January 2025. Gold accounted for 86% of the latest total, or approximately $57 billion.

The composition matters alongside the size. Reserves provide protection against external financial shocks, but such a large gold share also makes their reported value sensitive to movements in gold prices. Higher prices for gold and critical minerals are among the potential gains the bank identifies for Uzbekistan, along with stronger foreign direct investment.

Risks run in the other direction too. As a net energy importer, Uzbekistan is exposed to price increases linked to conflict in the Middle East. The bank expects that conflict to add modestly to inflation and widen the current account deficit. Escalating geopolitical tensions, tighter financing conditions and volatile commodity prices could weaken the outlook.

A stronger El Niño could also raise global food prices and worsen water constraints in 2027, affecting agriculture and inflation. Water management is already a regional priority: the regional water limits agreement approved in Avaza on October 7 covered the 2026 to 2027 season outside the main crop growing period. Country allocations were not disclosed, so the agreement alone does not establish whether future supplies will meet demand.

Growth must produce more secure jobs

Uzbekistan's national poverty rate fell from 17% in 2021 to 5.8% in 2025, a reduction of 11.2 percentage points. The World Bank says 3.7 million people moved out of poverty, while the middle class increased from 37% to more than 72% of the population.

Income gains were stronger among poorer households. Average real household income in the bottom fifth grew by 26% during 2024 and 2025, compared with 13% in the top fifth. The bank nevertheless estimates that 22% of people remain vulnerable to falling back into poverty.

Employment quality is a separate challenge from the headline growth rate. More than 60% of private sector jobs in Uzbekistan, Kyrgyzstan and Tajikistan remain informal, with little change over the past five years. Informal work generally falls outside formal employment arrangements, which can leave workers with less reliable access to protections and benefits.

Uzbekistan's population reached 38.5 million on July 1, 2026, the largest in Central Asia. Unlike much of the wider region, where populations of working age are expected to shrink, Uzbekistan needs to create opportunities for a growing workforce. Government targets for 2026 include stable employment for one million people, lifting 181,000 families out of poverty and reducing both unemployment and poverty to 4.5%.

The reform agenda includes reducing state dominance, opening key sectors and improving conditions for business and investment. The World Bank says accession to the World Trade Organization could anchor those reforms and boost GDP by up to 17%. That estimate is a potential effect of accession, not an annual growth forecast or a gain assigned to a specific year.

AI exposure is ahead of practical adoption

The economic update also examines artificial intelligence as a possible response to weak productivity growth. About one in five workers across Europe and Central Asia holds a job meaningfully exposed to AI, particularly younger workers, people with higher education and women. Exposure means that AI could affect their tasks; it does not establish that their jobs will disappear.

Fewer than one in ten regional firms uses AI in business operations, roughly half the share in the European Union. Most uses remain confined to routine activities such as answering customer inquiries, preparing documents and managing internal information, without measurable productivity effects.

The World Bank identifies limits in computing resources, management skills and usable data as obstacles. Regional data center capacity is roughly 2.1 megawatts per million people, compared with 31.6 in high income countries outside the region. On that measure, the comparator has about 15 times as much capacity. Megawatts here indicate the electrical power capacity supporting data center operations, not a direct measure of AI performance.

Demand for AI workers has nearly quadrupled in the region. Early labor market signals point more toward reduced hiring than displacement of existing employees, with AI also helping some workers perform their current tasks. The bank presents insufficient and uneven adoption as a greater risk over the next decade than excessive adoption.

In its regional assessment, the World Bank describes how governments could encourage investment in computing infrastructure:

Governments can help attract such capital by expanding access to cheap computing power,

The bank also identifies the possibility of exporting computing infrastructure services where sufficient demand exists. That prospect depends on infrastructure and commercial demand, rather than following automatically from greater AI use.

Uzbekistan's skills gap and the next milestones

Clerical workers face the highest AI exposure among occupational groups in Uzbekistan, yet their reported use of the technology trails that of professionals and managers. In the March 2026 Listening to Uzbekistan survey, 48% of professionals and 43% of managers said they used AI at work, compared with 27% of office workers.

Even among workers in occupations assessed as having almost no automation potential, 16% reported AI use. This helps distinguish a person's use of an AI tool from the share of their job that could be automated. Neither measure alone predicts a job loss.

A later survey round found that nearly 39% of employed respondents could not copy or move a file on a phone or computer without assistance. These are worker survey results, not company adoption rates, so they should not be directly compared with the regional figure of fewer than one in ten firms using AI.

Uzbekistan is among the countries pursuing skills programs organized around industry needs. The World Bank recommends stronger basic, digital and management skills, affordable computing access, better organized data and programs supporting workers through employment changes. Its Uzbekistan program comprised 24 projects and $5.4 billion in net commitments as of October 5, 2026, with more than 60% financed through concessional credits from the International Development Association.

The main dates and forecast milestones are:

• April 2026: The earlier growth forecasts were 6.4% for 2026 and 6.7% for 2027.
• October 6, 2026: The regional update raised those forecasts to 7.9% and 7.5%.
• 2027: Uzbekistan is projected to lead the region's developing economies in growth.
• 2028: Growth is forecast at 7.1%, while inflation is expected to approach 5%.
• 2030: The national development strategy targets upper middle income status and the elimination of absolute poverty.

The forecasts do not guarantee those outcomes. The pace of domestic investment, conditions in Russia and China, energy prices, water availability and progress in creating productive formal jobs will determine how much of the projected expansion reaches households.

Key Points

• Uzbekistan's 2026 growth forecast rose to 7.9%, an increase of 1.5 percentage points from April.
• The country ranks second in the 2026 regional forecast, behind Kyrgyzstan at 9.6%.
• Private consumption and investment grew by 9.5% and 10.5% in real terms in 2025.
• Remittances reached $9.2 billion in the first half of 2026, with about 70% coming from Russia.
• Inflation is projected at 7% in 2026 and public debt around 28% of GDP in 2026 and 2027.
• Informal employment and weak basic digital skills remain challenges despite strong growth.
• The World Bank sees uneven AI adoption, rather than exposure alone, as a major productivity risk.