S&P Global Ratings assigned long-term issuer credit ratings of BB- in both local and foreign currencies to the administration of the Andijan region on November 6, 2026. The agency noted that the outlook remains stable.
Andijan, located in the Fergana Valley in eastern Uzbekistan, benefits from strong financial performance and the absence of commercial debt. However, analysts pointed out that the rating limitations are due to the low level of regional welfare and uncertainty caused by an unstable institutional environment that limits predictability.
The stable outlook reflects a balance between a history of balanced budgets and low debt burden on one hand, and risks associated with the unstable regulatory framework governing local and regional authorities of Uzbekistan on the other. Furthermore, key budgetary decisions are made by the central government, and the influence of regions, including Andijan, on them is limited.
S&P drew attention to the frequent changes in approach to major taxes, transfers, and expenditure obligations by the central government. The last such changes occurred at the end of 2025. This undermines the stability of the region's revenue and expenditure commitments, making medium-term planning difficult.
According to analysts, debt and liquidity management practices are still in the early stages. For example, the practice of placing funds in commercial banks was only introduced in 2026, and its effectiveness has not yet been tested.
The agency characterizes the region's economy as weak by both national and international standards. GDP per capita is estimated at $2,800–$2,900, which accounts for about 64% of the national average. Nevertheless, Andijan is one of the most industrialized regions in Uzbekistan, ranking fourth in the country and accounting for 10.5% of industrial production. This is largely due to the automotive cluster around the UzAutoMotors plant in Asaka. S&P forecasts that real GDP per capita growth in 2027–2028 will average about 6.5%, consistent with the national forecast.
The agency expects the region to maintain strong budget performance. It is projected that the Andijan region will demonstrate a balanced budget or a small surplus over the next three years. According to S&P data, the region's operating income in 2025 was 6.27 trillion soums, while operating expenses reached 6.21 trillion soums, resulting in an operating balance of 62.5 billion soums. For 2026, the agency expects operating income of about 6.2 trillion soums and an operating surplus of 45.8 billion soums.
Social expenditures account for 80% of the regional budget, which limits its flexibility. S&P forecasts an increase in capital expenditures from 292 billion soums in 2026 to 650 billion soums in 2027, aligning with the region's goal of increasing infrastructure investment. These investments are expected to be financed primarily through capital transfers from the central budget.
The region's debt burden remains very low. Current legislation prohibits local and regional authorities from taking on commercial debt, and any budget deficit is covered by additional transfers from the central government. Andijan has no commercial debt, and its debt to the central budget does not exceed 1% of operating income, including transfers. Direct debt at the end of 2025 amounted to 22.5 billion soums, equivalent to 0.4% of operating income.
The sector of organizations related to regional authorities is small. The regional administration owns shares in approximately 50 companies, mainly agricultural markets. The agency found no instances of regional subsidies, capital injections, or emergency support for these companies. Districts and cities throughout the region are also financially stable thanks to support from the central government.
Regional liquidity is expected to remain sound, aided by its near debt-free status. Andijan is entitled to receive preferential budget loans to cover cash flow gaps. According to S&P, access to external financing is limited by the underdevelopment of the country's capital and banking sectors.
The agency may downgrade the rating if changes in the relationship between Andijan and the central government weaken regional support and lead to deterioration in its budget or debt position. A rating upgrade may be considered in the long term if the institutional environment for local and regional authorities significantly improves, becoming more predictable and transparent, and regions gain more influence over central government decisions. Improving the quality of financial management within Andijan is also necessary.
