Eurasian Development Bank (EDB) project that Kyrgyzstan's GDP will grow by 10.3% in 2025, driven by strong consumer demand supported by a sharp rise in remittances. The figures were published in the EDB’s latest Weekly Macro Review, which also highlights persistent inflationary pressures in Uzbekistan and Kazakhstan, and the continuing impact of monetary policy in the region.
In the Kyrgyz Republic, net remittance inflows totaled $1.22bn between January and May 2025, marking a 25.8% year-on-year (y/y) increase. A significant portion of the growth came from Russia, where remittances rose 17.2% y/y, in part due to higher average wages.
The resulting boost to household incomes has translated into a surge in domestic consumption, with retail trade volumes up 25.3% y/y, supporting broader economic expansion.
In Uzbekistan, annual inflation remained unchanged at 8.7% y/y in June 2025, according to EDB analysts. However, inflation components moved in opposite directions: food prices accelerated to 6.0% y/y (up from 5.3% in May), while non-food inflation slowed to 7.0% y/y from 8.2%.
The services sector continues to face elevated inflation at 15.8% y/y, marginally down from 15.9% in May, as a result of ongoing reforms in utility pricing aimed at liberalizing the housing and communal services market. The EDB expects that the current moderately tight monetary stance will contribute to slowing inflation to 8.1% y/y by the end of the year.
The National Bank of Kazakhstan kept its base rate unchanged at 16.5% during its July 11 policy meeting, in response to a rise in both headline inflation and forward-looking indicators. Inflation climbed to 11.8% y/y in June, up from 11.3% in May, while inflation expectations jumped to 14.1% in May, from 12.2% in April.
EDB analysts believe the current policy rate remains adequate to anchor expectations and prevent further inflationary acceleration. However, returning inflation to the target range of 5% may require the continuation of tight monetary conditions through at least the first quarter of 2026.
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