Central Asia’s economies have continued to post robust growth through 2025, supported by domestic demand, infrastructure investment, and rising commodity exports, according to the Asian Development Outlook (ADO) released in September. While all five Central Asian states — Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan — are benefitting from expansionary policies and resilient remittance inflows, risks tied to inflation and global trade tensions remain significant.
Uzbekistan: Strong Expansion Anchored in Gold Exports
Uzbekistan recorded 7.2% economic growth in the first half of 2025, driven by buoyant consumption, steady investment, and surging gold exports. From January to July, exports rose by 34.7% to $20.1 bn, with gold offsetting declines in textiles, automobiles, steel, and petroleum products. Imports grew more moderately, helping trim the current account deficit. Remittances also increased, supporting household consumption and stabilising the balance of payments.
Inflation remained high at an average of 9% in the first seven months, driven particularly by services costs following utility tariff adjustments. Headline inflation eased to 8.9% in July, but forecasts remain unchanged at 8% for 2025 and 7% for 2026. The Central Bank of Uzbekistan has held its policy rate at 14% to anchor expectations, while fiscal policy continues to prioritise stability and investment in infrastructure and social programmes. A new Fiscal Strategy for 2026–2028 is expected to bolster resilience.
Kazakhstan: Oil and Infrastructure Lift Growth
Kazakhstan’s economy expanded by 6.2% in the first half of 2025, supported by higher oil production, manufacturing, services, and large public infrastructure projects. However, inflation has accelerated into double digits, fuelled by currency depreciation and utility price hikes. The government’s decision to raise value-added tax from 12% to 16% next year is likely to intensify pressures. While public debt remains low, the current account deficit has widened to 2.9% of GDP.
Kyrgyz Republic: Rapid Growth but Rising Inflation
The Kyrgyz Republic registered the fastest growth in the region at 11.7% in early 2025, propelled by construction, trade, and private consumption. Remittances, higher wages, and credit growth reinforced demand. However, inflation has climbed beyond the central bank’s 5–7% target, reaching 8% in June, largely due to food prices and utility tariffs. Inflation forecasts for 2025 and 2026 have been revised upward to nearly 8%. Fiscal revenues surged, enabling an 8.5% surplus, which is financing infrastructure while keeping debt sustainable
Tajikistan: Strong Remittance Flows Cushion Risks
Tajikistan grew by 8.1% in the first half of the year, with industry, especially metal ore production, leading expansion. Robust remittance inflows generated a current account surplus equal to 7.7% of GDP despite a rising trade deficit. Inflation has trended downward, aided by currency appreciation, leading to lower projections for both 2025 and 2026. Fiscal revenues rose by 11.5%, allowing increased social spending while reducing public debt.
Turkmenistan: Public Investment Sustains Steady Growth
Turkmenistan reported stable growth at 6.3%, supported by expansion in agriculture, services, and heavy public investment in industrial and social infrastructure. The government is targeting a balanced budget with low public debt, though external vulnerabilities persist due to dependence on energy exports.
Regional Outlook: Growth with Vulnerabilities
Overall, Central Asia’s growth forecast has been lifted slightly to 5.5% for 2025, though lowered to 4.9% for 2026 due to expected moderation in trade. Inflation for the subregion is revised upward to 7.7% in 2025 and 6.6% in 2026, driven by utility tariff adjustments and currency depreciation.
While fiscal revenues are strong across the region, underpinning large-scale investments, risks from global trade disputes, tariff changes, and volatile commodity prices could slow momentum. For Uzbekistan in particular, gold exports and remittances have provided resilience, yet elevated inflation and external uncertainties highlight the challenges of sustaining stability in a shifting global environment.
Kursiv also reports that the European Bank for Reconstruction and Development (EBRD) has forecast average economic growth of 6.1% across Central Asia in 2025.
