ADB Raises Economic Growth Forecast for the Caucasus and Central Asia Through 2026

Tashkent, Uzbekistan (UzDaily.com) — The Asian Development Bank (ADB) has revised upward its economic growth forecast for the Caucasus and Central Asia region, now projecting 5.8% growth in 2025, compared with the previous estimate of 5.5%, and 5.0% in 2026 instead of 4.9%.

Higher-than-expected economic growth in Kazakhstan and steady performance in other subregional countries were key factors behind the forecast revision.

In the third quarter of 2025, growth was supported by government investments, stable domestic demand, remittances, and favorable macroeconomic conditions.

Different countries showed varying dynamics: Armenia recorded growth driven by construction and agriculture despite a slowdown in the services sector; Georgia relied on services, tourism, and external inflows; and Azerbaijan experienced moderate growth amid ongoing challenges in the energy sector.

In Central Asia, Kyrgyzstan and Tajikistan grew due to consumer demand, investments, and high remittance inflows. Uzbekistan demonstrated comprehensive growth supported by investments, reforms, and a stable external balance.

The largest upward revision was for Kazakhstan: economic growth for 2025 is now projected at 5.8% instead of 5.3%, and for 2026 at 4.5% instead of 4.3%.

This year’s acceleration is driven by strong performance in transport, construction, industry, and agriculture, while next year growth is expected to slow due to tighter monetary policy, an increase in VAT from 12% to 16%, reduced fiscal incentives, and planned oil production decline to 96.2 million tons.

The inflation forecast for the region has also been revised upward: 8.0% in 2025 versus 7.7%, and 7.1% in 2026 versus 6.6%.

The strongest inflationary pressures come from Kazakhstan and Kyrgyzstan due to rising prices for food, services, and utilities.

In Kazakhstan, inflation reached 11.2%, with a forecast of 9.5% in 2026, while in Tajikistan, Armenia, Azerbaijan, Georgia, Turkmenistan, and Uzbekistan, inflation remains under control.