Jizzakh Region assigned BB- ratings with stable outlook by Fitch

Traders Union
All News
Regulators
Jizzakh Region BB- rating

Highlights

Fitch assigned Jizzakh Region BB- long-term foreign- and local-currency Issuer Default Ratings with Stable Outlooks, reflecting its standalone credit profile of 'bb-'.
Transfers comprised 51% of Jizzakh's 2025 operating revenue and inflation averaged 10% over 2021-2025, highlighting revenue volatility and high expenditure inflexibility.
Jizzakh's payback ratio is projected at about 8x for 2026-2030 with fiscal debt burden below 50%, as borrowing remains mainly from the central government due to market access restrictions.

Rating rationale and financial assumptions

As reported by Fitch Ratings, Jizzakh Region's long-term foreign- and local-currency Issuer Default Ratings are set at 'BB-' with Stable Outlooks, in line with its standalone credit profile of 'bb-'. Fitch says this is based on the expectation that the region's payback ratio remains below 9x by 2030 under its rating case.

Fitch assesses Jizzakh's standalone credit profile as a combination of a 'Weaker' risk profile and a financial profile at the lower end of the 'aa' category, alongside peer comparisons. The agency says all six key risk factors are assessed as 'Weaker', reflecting volatility in revenue, limited fiscal autonomy, constrained spending flexibility and a weak national framework for debt and liquidity management.

The agency says Jizzakh's revenue base remains exposed to tax and budget reforms in Uzbekistan, with the central government controlling tax rates and the allocation of tax proceeds across government tiers. Transfers accounted for 51% of operating revenue in 2025, while taxes made up 44%, and transfers averaged 53% of operating revenue over 2021-2025.

On the expenditure side, Fitch says spending predictability is constrained by shifting regional responsibilities and inflation that averaged 10% in 2021-2025. It adds that 50% of the region's expenditure in 2025 is inflexible, with salaries alone representing about 43% of operating spending, limiting the scope for cuts if revenue weakens.

Constraints on debt and implications for credit quality

Fitch says Jizzakh's liquidity relies on its cash balance of UZS41 billion at end-2025, although most of that cash is restricted for specific uses. The region also has access to a central government liquidity mechanism, including short-term budget loans to cover intra-year cash gaps.

Under national legislation, the region is barred from contracting market debt, which Fitch says limits market access and debt management experience. While some government-related entities under Jizzakh's oversight have borrowed from banks, Fitch says the overall amount remains limited and those companies have historically serviced debt from their own revenue.

Fitch assesses the region's financial profile at the lower end of the 'aa' category, with a payback ratio of about 8x expected at the end of its 2026-2030 rating case. The agency says debt service coverage averages 2x over the final three years of that period, while the fiscal debt burden remains below 50%, a level consistent with its highest assessment for that metric.

The base case assumes restrictions on new borrowing remain in place over the rating horizon and that new debt stays moderate, mainly sourced from the central government. Fitch's rating case also considers a more stressed scenario with new market debt, larger capital expenditure and deficit financing through borrowing, alongside a gradual deterioration in the operating balance due to pressure on key cost and revenue items.

In our earlier coverage of geopolitical shocks and refinancing strain, we explained how persistent conflicts, elevated fiscal spending and a higher-rate environment are raising borrowing risks and tightening fiscal headroom for sovereigns. We noted that emerging and frontier markets are especially exposed because interest-service costs often run high relative to narrow revenue bases, while energy and food price spikes add inflation pressure that can weigh on credit outlooks.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.