The Asian Development Bank (ADB) forecasts Central Asia's economic growth at 4.5% in 2024 and 5.1% in 2025, up from 4.3% and 5.0%, respectively.
“The region’s economy remained robust in the first quarter (Q1) of 2024, driven by strong export growth and solid domestic demand. Inflation continued to moderate toward pre-pandemic levels, mainly due to the lagged effects of monetary policy tightening. While growth projections remain broadly unchanged, downside risks persist, including heightened geopolitical tensions, trade fragmentation, and uncertainties related to elections in major economies,” ADB report noted.
In the first four months of 2024, Azerbaijan’s economy expanded by 4.3%, driven by robust activity in transport and construction, bolstered by public spending. Kyrgyzstan saw growth of 8.8% in 1Q24, thanks to strong performance in services and construction, underpinned by both domestic and foreign investments.
Other countries in the region also recorded notable economic expansions. Armenia grew by 9.2% in Q1 2024, fueled by growth in manufacturing. Georgia's economy expanded by 9.0% during the same period, supported by strong credit and investment. Tajikistan experienced an 8.2% growth rate, buoyed by increased exports, particularly gold sales. Uzbekistan saw a 6.2% growth in 1Q24, driven by a surge in fixed capital investment.
"A surge in fixed capital investment in Uzbekistan led to 6.2% growth in Q1 2024," report indicated.
Kazakhstan, the region's largest economy, achieved a 3.7% growth in 1Q24, primarily supported by construction, manufacturing, and services. Government initiatives to assist flood victims and rebuild infrastructure are expected to sustain growth in construction. The mining sector, especially with the completion of the Tengiz oil field expansion project by 2Q25, is anticipated to contribute to Kazakhstan's growth.
"The mining is expected to make a sizable contribution to Kazakhstan’s medium-term growth after the completion of the Tengiz oil field expansion project in Q2 2025."
Inflation Trends
The inflation forecast for the region has been revised downward. For 2024, inflation is projected to be 2.9%, reflecting significant reductions in Armenia, Georgia, and the Kyrgyz Republic. Armenia recorded a deflation of 0.8% in the first five months of 2024, a sharp contrast to the 5.2% inflation recorded in the same period of 2023. Georgia’s inflation was limited to 0.9%, while the Kyrgyz Republic saw a decrease to 4.6% from 11.3% a year ago.
Other countries also reported easing inflationary pressures. Kazakhstan's inflation slowed to 9.0% from 18.5% a year earlier, Tajikistan’s inflation was 3.8%, and Uzbekistan's inflation decreased to 9.2% from 11.4% in the first five months of 2024.
Overall, the region’s economic outlook remains positive, driven by resilient domestic demand, improved exports, and manufacturing activity.
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