External debt of developing countries reached a record $9.4 trillion in 2025

According to the World Bank's International Debt Report 2026, Uzbekistan's public and state-guaranteed external debt reached $48.46 billion by the end of 2025, which is more than the $46.41 billion held by Kazakhstan. Nevertheless, Kazakhstan remains the largest borrower in the region in terms of total external debt, amounting to $183.1 billion, compared to $88.03 billion for Uzbekistan.

The main reason for the differences lies in private sector borrowings. Kazakh companies without state guarantees owe foreign creditors $115 billion, whereas their Uzbek counterparts owe $32.84 billion. Public debt accounts for about a quarter of Kazakhstan's total external debt, while in Uzbekistan it exceeds half.

Collectively, all five Central Asian countries owe foreign creditors approximately $293.7 billion, which is higher than the approximately $189.6 billion in 2015. The growth of about 72% over the decade is driven by Uzbekistan, whose external debt increased 6.5 times. Kyrgyzstan's debt grew from $7.72 billion to $12.53 billion, Tajikistan's from $5.15 billion to $7.15 billion, and Kazakhstan's from $156.15 billion to $183.1 billion. Turkmenistan went in the opposite direction, reducing its external debt from $7 billion to $2.85 billion.

In 2025, Uzbekistan demonstrated the fastest annual growth in external debt at 24.7%. Kazakhstan's debt grew by 10.3%, Kyrgyzstan's by 4.8%, and Tajikistan's by 1.8%. Meanwhile, Turkmenistan reduced its external debt by 14.1%.

Relative to the size of their economies, Kazakhstan had the highest debt burden, as external debt constituted 64% of its gross national income. In Uzbekistan, this figure was 60%, in Kyrgyzstan 56%, in Tajikistan 29%, and in Turkmenistan 6%.

On a per capita basis, external debt amounted to about $8,800 per person in Kazakhstan, about $2,400 in Uzbekistan, $1,700 in Kyrgyzstan, $660 in Tajikistan, and $375 in Turkmenistan.

Kazakhstan also faced the heaviest debt servicing burden relative to exports. In 2025, the country spent 64% of its export revenue on servicing external debt. In Uzbekistan, this figure was 29%, in Kyrgyzstan 28%, and in Tajikistan 8%. Kyrgyzstan's ratio almost tripled compared to 2024, while in Uzbekistan it decreased by 18.6%. The report does not contain data on export-related debt servicing for Turkmenistan.

China remained the largest bilateral creditor for four countries in the region. Kyrgyzstan and Tajikistan were most dependent on Chinese financing: $1.5 billion out of $1.9 billion of Kyrgyzstan's debt to foreign governments belonged to China, and the corresponding figure for Tajikistan was $738 million out of $894 million. Uzbekistan owes China $3.85 billion, and Kazakhstan owes $1.95 billion.

The composition of multilateral creditors varied across the region. The Asian Development Bank became Uzbekistan's largest multilateral creditor, with an outstanding debt of $8.36 billion. Kazakhstan owed the International Bank for Reconstruction and Development the most, amounting to $3.63 billion. The Association for International Development Assistance was the largest multilateral creditor for Kyrgyzstan, totaling $930 million, while Turkmenistan owes the Islamic Development Bank $811 million.

Kazakhstan relied most heavily on market borrowings. Of its public and state-guaranteed debt of $46.41 billion, $33.22 billion was owed to private creditors. Corresponding amounts were $15.11 billion for Uzbekistan, $700 million for Kyrgyzstan, $357 million for Tajikistan, and $240 million for Turkmenistan.

The terms of new loans also differed. In 2025, official creditors offered Kyrgyzstan the lowest interest rates—an average of 1.2% per annum with a repayment period of 28 years. Kazakhstan borrowed from official creditors at a rate of 1.9%, Turkmenistan at 2.8%, Uzbekistan at 3.4%, and Tajikistan at 5.6%.

Among private creditors, Kazakhstan took funds at a weighted average rate of 4.9%, Kyrgyzstan at 7.8%, and Uzbekistan at 8.6%. Tajikistan and Turkmenistan did not receive new loans from private creditors in 2025.

According to the World Bank's International Debt Report 2026, Uzbekistan's external debt as of the end of 2025 amounted to $88.03 billion, representing an increase of 24.7% during the year.

Over the last decade, the country's debt to foreign creditors has increased by approximately 6.5 times, rising from $13.57 billion in 2015. The growth of Uzbekistan's external debt has outpaced that of neighboring countries and developing economies overall.

In Europe and Central Asia, total external debt increased by 15.3% in 2025, while the growth among low- and middle-income countries was 5.5%.

Of the total amount of $48.46 billion, state debt and publicly guaranteed obligations account for a portion. An additional $32.84 billion consists of external loans from private companies without state guarantees. Short-term debt reached $6.73 billion.

The largest share of Uzbekistan's state and publicly guaranteed debt is owed to international financial institutions, amounting to $22.82 billion. This sum includes $8.36 billion owed to the Asian Development Bank and $5.01 billion to the International Development Association, which is part of the World Bank Group. Debt to other multilateral creditors totals $9.45 billion.

Estimated debt to governments of foreign states reached $10.53 billion. The largest bilateral creditors are China with $3.85 billion and Japan with $2.99 billion; the remaining countries total about $3.7 billion.

Obligations to private creditors total $15.11 billion, accounting for approximately 31% of Uzbekistan's state and publicly guaranteed debt.

The international bond market has become one of the main sources of financing. In 2025, Uzbekistan issued bonds worth $3.9 billion, exceeding the issuance volume of any other country eligible for concessional financing from the International Development Association.

According to the report, the government issued bonds worth $1.6 billion, including securities denominated in the national currency. Another $2.4 billion was attracted by other state structures. However, these two figures total $4 billion, which exceeds the total issuance stated in the report of $3.9 billion by $100 million.

The World Bank also noted the high cost of Uzbekistan's borrowing in the market. The yield on bonds denominated in soums with a maturity of 2028 reached 15.5%. The report authors attribute this rate partly to inflation risks. Dollar-denominated bonds were issued at a yield of 7.38%.

Borrowing costs vary significantly depending on the source of financing. In 2025, official creditors—foreign governments and international organizations—provided Uzbekistan with loans at an average interest rate of 3.4%, with a repayment period of 21 years and a five-year grace period. Private creditors offered financing at an average rate of 8.6% over 10 years, with the grace period covering the entire loan term.

The burden of the country's debt relative to economic output has also increased. External debt reached 60% of gross national income and 227% of export revenue, with both indicators exceeding the previous year's level.

Simultaneously, debt service costs decreased relative to economic indicators. In 2025, payments on principal and interest amounted to 29% of export revenue and 8% of gross national income. Compared to 2024, these ratios decreased by 18.6% and 17.7%, respectively.

In the Europe and Central Asia region, external debt service costs in 2025 amounted to 25% of export revenue and 8% of gross national income. According to the World Bank, this was the highest debt service ratio to income among regions including low- and middle-income countries.

Amid growing debt and inflation issues in many countries worldwide, including the USA, the Indian government has set targets to combat debt risks. The central government confirmed its commitment to controlling budget deficits and reducing public debt.

The Union Finance Minister, Nirmala Sitharaman, stated on Monday that the government's goal is to limit the national debt to 50 percent of the country's GDP by 2030. She emphasized that the government is taking continuous steps to reduce the debt, and international organizations have recognized India's debt management methods.

These statements were made by Sitharaman during a press interaction in Tiruchirappalli, Tamil Nadu. Furthermore, she addressed questions regarding inflation, debt growth, per capita income, and opposition protests.

Nirmala Sitharaman reiterated that the government's push to reduce the budget deficit is reflected in annual budgets. It was clearly stated that the national debt must be capped at 50% of GDP by 2030. The minister noted that after the COVID-19 pandemic, many countries faced debt-related challenges.

India is also consistently taking steps to reduce public debt under these conditions. According to the finance minister, India is following a disciplined path in debt management, which has been acknowledged by international organizations. The government will continue to work on reducing debt and the fiscal deficit.

A budget deficit is the difference that arises when the government's total expenditures exceed its revenues, excluding borrowings. To cover this gap, the government has to take loans. While GDP (Gross Domestic Product) reflects the total value of goods and services produced in a country over a specific period, the debt-to-GDP ratio helps understand the extent of the debt burden on a country's economy relative to its size.

Responding to questions about inflation, the finance minister stated that the government has been working to stabilize prices since 2014. For this purpose, a special group of ministers was formed to improve supply chains. Nirmala Sitharaman also mentioned measures such as restrictions on rice exports. The aim of such decisions was to prevent price hikes in the domestic market and ease the situation for consumers. Additionally, the government aimed to ensure farmers received the Minimum Support Price (MSP) for their produce.

According to the finance minister, despite global inflationary pressures and economic strain, the government has tried to minimize the burden on ordinary citizens.

Regarding questions about protests being held over alleged irregularities related to SIR and demands for action against the Chief Election Commissioner (CEC) from opposition parties, the finance minister responded that democracy offers multiple ways to express dissent. These include seeking justice through the courts and holding demonstrations with demands on the streets. Sitharaman pointed out that various groups use both methods, calling court appeals and protests forms of democratic dissent.

The finance minister also announced that the government is taking several measures to increase per capita income in the country. She acknowledged that the COVID-19 pandemic, military actions, challenges related to economic reforms, and fluctuations in fuel and crude oil prices have put pressure on the economy. Nevertheless, she stressed that the government has tried to prevent these difficulties from excessively affecting the common people. Efforts to raise per capita income will continue.