MPs passed amendments to the 2024 State Budget Law, raising the ceiling on external loans in three readings at the session on Tuesday. The document was sent to the Senate for approval.
As reported earlier, the newly elected MPs approved supplemantary expenditures of ministries and departments in 2024 by 9.98 trillion soums, or $775.8 million. They did not discuss the bill, did not give questions, with not a single vote against and abstention. The entire process took 9 minutes. No one publicly substantiated the need for the amendments.
The amendments also included an increase in the ceiling on external loans. The Law outlined restrictions on the size that the government of Uzbekistan could borrow in 2024. In particular, the government was prohibited to sign new international loan agreements (external borrowing) for a total amount exceeding $5 billion. Of this amount, $2.5 billion was planned to be used to support the budget (cover the budget deficit - when expenses exceed income), $2.5 billion - for investment projects.
However, the government raised the ceilings on government spending by $2.3 billion - to $7.3 billion: to finance the budget deficit to $3.2 billion (+ $700 million), for investment projects to $4.1 billion (+ $1.6 billion). Last year, the ceiling was increased from $4.5 billion to $5.5 billion.
The maximum net volume of government securities issued on behalf of Uzbekistan (attracting debt on the domestic market) is also increasing from 25 to 30 trillion soums.
According to the Cabinet of Ministers March 14 resolution, 4.373 trillion soums, allocated in local budgets for the construction and refurbishment of kindergartens and schools as part of the social production infrastructure development program, were transferred to the republican budget.
However, in the budget of the Ministry of Preschool and School Education, capital expenditures on design, construction (refurbishment) and equipment of facilities increased by only 3.95 trillion soums - to 4.7 trillion soums. Thus, approximately 423 billion soums allocated for the refurbishment and construction of schools and kindergartens are directed to other purposes.
Uzbekistan's public debt in 2024 is expected to increase by $ 4.8 billion from $ 34.9 billion to $ 39.7 billion. The public debt could reach $55.9 billion in 2027, but given it is 36.7% to GDP, the growth, according to the Ministry of Economic Development and Finance, will be “insignificant.”
