EBRD Issues Positive Outlook for Central Asian Economies

Tashkent, Uzbekistan (UzDaily.com) — The European Bank for Reconstruction and Development (EBRD) expects the economies of Central Asian countries — Kazakhstan, the Kyrgyz Republic, Mongolia, Tajikistan, Turkmenistan, and Uzbekistan — to grow by an average of 6.1% in 2025, according to its latest Regional Economic Prospects report released today.

Stable growth is being driven by strong industrial output, resilient domestic demand, investment, rising real wages, and high remittance inflows. The forecast for 2026 remains positive, though growth is expected to moderate to 5.2%. The main risks for the region’s economies include commodity price volatility, dependence on remittances, and continued reliance on the Russian and Chinese markets.

Kazakhstan, the region’s largest economy, is showing strong growth in 2025, fueled by higher oil production at the Tengiz field. Output increased by 11.6% in the first half of the year, boosting industrial growth, pipeline transportation, and wholesale trade. The construction sector accelerated to an annual growth rate of 18.4%, supported by major infrastructure projects, utility upgrades, and the modernization of residential and educational facilities. Strong household consumption and investment are also sustaining the economy. The EBRD projects GDP growth of 5.7% for Kazakhstan in 2025 and 4.5% in 2026. Key risks include heavy reliance on Russian transit infrastructure for oil exports and commodity price volatility.

The Kyrgyz Republic remains the regional growth leader. In January–June 2025, real GDP grew by 11.4% year-on-year. Growth was supported by high levels of public investment, domestic demand, rising wages, and remittance inflows. Industry, trade, and construction were the main drivers, while tourism and hospitality continued to expand steadily. The EBRD forecasts economic growth of 9.0% in 2025 and 6.0% in 2026. Growth will be driven by domestic demand, public infrastructure investment, and tourism development, while a potential decline in remittances remains a key risk.

Mongolia maintained solid growth in the first half of 2025 despite a weaker extractive sector and a more challenging macroeconomic environment. Real GDP grew by 5.6% year-on-year, driven by strong agricultural output (+35.6% after two years of unfavorable weather conditions) and expansion in services. Mining output remained broadly flat due to lower coal production and prices, offset by rising copper output. Private consumption, real wage growth, and investment supported demand. The EBRD forecasts GDP growth of 5.8% in 2025 and 5.5% in 2026, while warning of risks tied to weaker Chinese demand and commodity price volatility.

Tajikistan continues to post strong results: real GDP grew by 8.1% in January–June 2025. Growth was broad-based, driven by domestic trade, agriculture, transport, and industry. Mining — which accounts for about one-third of industrial production — nearly doubled thanks to increased output of metal ores. Household consumption remained high, supported by a 17.2% increase in real wages and a 64% surge in remittances. The EBRD highlights Tajikistan’s effective cooperation with international organizations, including World Bank support and IMF coordination, as a key factor for medium-term growth. The bank projects GDP growth of 7.5% in 2025 and 5.7% in 2026. Strong gold prices, infrastructure investment, and remittances will support growth, though falling remittance volumes remain a risk.

Turkmenistan also shows steady growth: in the first half of 2025, real GDP rose by 6.3%, driven by trade, transport, services, and construction. Investments increased by 15.6%. The EBRD forecasts GDP growth of 6.3% in both 2025 and 2026, supported by investment in energy, infrastructure, agriculture, and food processing.

Uzbekistan accelerated its economic growth in the first half of 2025, with real GDP expanding by 7.2% year-on-year. Strong domestic demand, backed by rising real wages and a 28.7% increase in remittances, fueled 8.2% growth in the services sector. Industry strengthened on the back of the food and metallurgy sectors, while mining benefited from higher global gold prices, offsetting weaker gas output. The EBRD projects Uzbekistan’s economy to grow by 6.7% in 2025 and 6.0% in 2026, driven by resilient household consumption, investment, diversified industrial growth, and sustained inflows of foreign investment.