Economic growth in Central Asia slowed slightly from 5.7% in 2023 to an estimated 5.4% in 2024, largely due to stagnation in mining output in Kazakhstan and Uzbekistan, according to the recent report released by European Bank for Reconstruction and Development (EBRD). Growth is expected to rebound to 5.7% in 2025 before moderating to 5.2% in 2026. While domestic demand remains a key driver, intermediated trade is unlikely to provide additional momentum.
Countries in Central Asia continued to post strong growth in 2024, supported by rising real wages, remittance inflows, and a favorable tourism season that boosted the services sector. However, inflation picked up in the latter half of the year, driven by increased demand, energy tariff hikes, and currency depreciation in some countries. Fiscal conditions remain mixed, with some economies experiencing revenue growth while others face persistent budget deficits. Despite rising government debt, growing international reserves provide a cushion against external shocks.
Uzbekistan
Uzbekistan's economy remained resilient in 2024, driven by robust services sector expansion. While mining output stagnated, industrial production continued to grow rapidly. Inflation peaked at 10.6% mid-year due to energy price liberalization but eased to 9.8% by December.
The Central Bank of Uzbekistan expects inflation to decline to its 5% target by 2026. The current account deficit narrowed in 2024 as remittances surged by 30%, and foreign reserves rose to $42.9bn in early 2025, aided by higher gold prices.
Fiscal consolidation continued, with reduced energy subsidies and planned budgetary savings in 2025 to control expenditures. As per EBRD, the economy is expected to maintain a strong growth rate of 6% in both 2025 and 2026.
Kazakhstan
Kazakhstan’s economy remained strong in 2024, driven by robust non-oil sector expansion. Agriculture, construction, trade, and transport saw the highest growth, while mining declined slightly due to reduced oil output.
Inflation in Kazakhstan reached 8.9% in January 2025, driven by strong demand, including the effects of fiscal stimulus, and a weaker tenge in late 2024. In response, the National Bank raised its policy rate by 1% to 15.25% in November 2024 and kept it unchanged in January 2025.
The government continues to run a budget deficit amid high expenditures. GDP growth is forecasted at 5.2% in 2025, supported by the Tengiz oil field expansion, but is expected to slow to 4.5% in 2026.
Kyrgyzstan
Kyrgyzstan's economy grew by 9% in 2024 and 10.6% year-on-year in January 2025, driven by strong domestic demand, including a 19% rise in remittances and robust wage growth. Investments surged, particularly due to a doubling of public investments.
Key sectors like construction, domestic trade, and hospitality saw double-digit growth. Inflation dropped to 3.8% in August 2024 but rose to 6.7% by January 2025 due to demand-side pressures, still within the central bank’s target range of 5-7%. The central bank kept the policy rate at 9% since May 2024.
The fiscal position improved thanks to higher tax receipts and slower spending growth. International reserves reached a record $5.2bn in January 2025, mostly in gold. Real GDP is expected to moderate to 7% in 2025 and 6% in 2026, down from 9% in 2024.
Tajikistan
Tajikistan's economy showed strong growth in 2024, with real GDP rising by 8.4% in the first three quarters. Both private and public investments increased, particularly due to the Rogun dam construction and other infrastructure projects. Growth was broad-based across industry, services, and agriculture.
Price controls helped keep inflation at 3.6% in December 2024, below the central bank’s target of 6+/-2%. The current account likely remained in surplus due to strong remittance inflows, and international reserves grew.
The fiscal deficit is expected to stay manageable under the IMF Policy Coordination Instrument (PCI) program, which focuses on macroeconomic stability and structural reforms. The first review of the PCI was approved by the IMF in December 2024, with most targets met. The economy is forecast to moderate to 7% growth in 2025 and 5.7% in 2026, down from 8.4% in 2024, supported by ongoing infrastructure investments
Turkmenistan
Turkmenistan’s official data shows 6.3% GDP growth in 2024, with the highest expansion in construction, trade, and services. Economic activity was supported by credit expansion, rising wages, and a 9.1% increase in investment.
Although inflation data is not officially released, the IMF estimated it at 5.0% for 2024. Both the current account and fiscal balance showed surpluses, though smaller than in 2023. EBRD noted that public debt remains low.
The report noted that the real GDP is expected to remain the same at 6.3% in 2025 and 2026, driven by ongoing investments in energy, infrastructure, agriculture, and food processing.
Broader Regional and Global Context
Global growth remains subdued, with EBRD regions growing at an estimated 2.7% in 2024, down from 3.4% in 2022.
According to EBRD, the economic impact of Russia’s war on Ukraine continues to weigh on performance. Growth in 2025 is expected to reach 3.2%, with an expectation for a slight improvement in 2026, with growth reaching 3.4%.
Meanwhile, foreign direct investment (FDI) flows from China and the US into ‘connector’ economies, including Uzbekistan, have risen significantly. Countries benefiting the most include Vietnam, Mexico, the UAE, Spain, Thailand, Malaysia, and Saudi Arabia.
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