According to the Eurasian Development Bank (EDB), Central Asia’s economy is expected to grow by about 6.6% in 2025 and expand by about 6.1% in 2026.
This includes data for Kazakhstan, Kyrgyz Republic, Tajikistan, and Uzbekistan, but does not include figures for Turkmenistan due to data limitations.
These numbers are significantly more optimistic than forecasts for major developed countries, with the bank forecasting growth of around 1.6% in the US and 1.1% in the euro area in 2026, while China is expected to grow around 4.6%.
Despite the big headline numbers, many households in Central Asia face rising prices, high borrowing costs and uneven income growth.
Economists say that inflation and monetary tightening, rather than a country’s optimistic growth rate, often shape people’s day-to-day economic reality.
Rapid but uneven growth
Growth across the bloc is accelerating, but unevenly. The Kyrgyz Republic has emerged as the region’s fastest growing economy, with EDB forecasting growth of 10.3% in 2025 and 9.3% in 2026.
This is followed by Uzbekistan, which is expected to grow by 7.4% in 2025 and 6.8% in 2026.
Kazakhstan’s economy is expected to expand by about 5.9% in 2025 and 5.5% in 2026, which would represent the strongest growth for the entire region in more than a decade.
Kubat Rakhimov, a Kyrgyz expert on infrastructure development in Central Eurasia, argues that in underinvested countries, growth of around 6% often reflects a catch-up phase, while in developed countries, growth of 1.5-2% is already considered good.
He added that GDP growth is an imperfect measure of happiness, noting that real disposable income and labor productivity are better indicators of actual living standards.
Reality check per person
Economists warn against comparing growth rates without taking into account the size of the economy. Central Asia has a combined population of about 80 million people, much smaller than the population of any major region of the world.
Furthermore, according to the latest data from the World Bank, Kazakhstan’s per capita GDP is approximately $14,154 (12,107 euros), compared to Uzbekistan’s approximately $3,162 (2,704 euros) and the Kyrgyz Republic’s approximately $2,420 (2,070 euros).
By comparison, the United States’ GDP per capita was approximately $84,534 (72,313 euros), while China’s was approximately $13,303 (11,379 euros).
These gaps help explain why Central Asia’s rapid headline growth does not automatically translate into living standards on par with larger economies and developed countries, even as incomes in Central Asia continue to rise.
Inflation eats away at growth rates
For many households, the benefits of rapid growth are being eroded by inflation. In Kazakhstan, price increases exceeded GDP growth last year, with inflation at around 12.3%. The inflation rate in the Kyrgyz Republic was approximately 9.1%, and in Uzbekistan it was approximately 7.5%.
“A decline in inflation will create conditions for interest rate cuts, and we expect most national currencies in the region to exhibit broadly stable movements,” said Evgeny Vinokurov, chief economist at EDB.
Until then, interest rates will remain tight due to inflationary pressures. Kazakhstan’s main policy interest rate remains at around 18%, while Uzbekistan’s is around 14% and Kyrgyz Republic’s is around 11%.
Why Kyrgyzstan leads the region
Analysts say some of Central Asia’s recent GDP growth has been supported by a redirection of trade and logistics flows, particularly in smaller economies.
They argue that Kyrgyzstan’s strong headline numbers reflect the reconfiguration of supply chains caused by Russia’s all-out invasion of Ukraine.
Kubat Rakhimov linked Kyrgyzstan’s unusually rapid growth to these structural changes, saying that Kyrgyzstan was “almost perfectly adapted” to the economic conflict between Russia and the West.
“Our company has traditionally been engaged in re-exporting goods from China to the Russian market. This has been a very strong niche market for our company,” Rakhimov said.
“If we needed to change additional trade flows, there was no need to build new systems; the logistics and financial channels were already in place,” he added.
The reorientation of trade, combined with the nationalization of the Kumtor gold mine, which now accounts for a higher proportion of domestic revenues, has strengthened public finances and enabled increased infrastructure spending.
It also created short-term synergies in construction and transportation.
However, Rakhimov cautions that these factors are cyclical in nature and that growth built on geopolitical tensions remains vulnerable to external change.
At the same time, EDB data shows that this expansion is mainly driven by domestic factors, particularly consumption and investment. Strong domestic demand, rapid credit growth and large-scale infrastructure projects have played a central role.
What is driving expansion in Kazakhstan and Uzbekistan?
In the region’s economic powerhouses, growth is further driven by industrial investment.
Kazakhstan is experiencing growth in manufacturing, particularly in the machinery and energy sectors.
A key factor was that capacity expansion at the Tengiz field started earlier than expected, which is why we have revised our forecasts upward for this year.
“This is mainly because the effect of unlocking investment potential turned out to be stronger than we expected in June,” said Aigul Berdyglova, senior analyst at EDB’s Center for Macroeconomic Analysis.
“In addition, industrial production has increased rapidly this year, mainly as a result of government policies aimed at economic diversification,” she continued.
Uzbekistan’s expansion appears to be more widespread. In the first nine months of 2025, fixed capital investment increased by 15.2% year-on-year, and export value increased by 33.3%.
The country’s export earnings from the precious metal increased by 70.5%, driven largely by the continued high price of gold.
risks and narrow windows
Despite this optimism, economists see significant headwinds.
The World Bank predicts a sharper slowdown than the EDB, predicting regional growth will slow to around 5.0% in 2026 and 4.6% in 2027.
They cite vulnerabilities related to slower growth in trading partners and continued uncertainty and disruption in global trade.
Analysts have warned that the current boom could fade under several scenarios, including a global economic crisis, an end to active hostilities between Russia and Ukraine, and changes in global demand for hydrocarbons and metals.
In such a case, the “geopolitical rent” that Central Asia currently enjoys could evaporate. The challenge, Rakhimov says, is to turn temporary momentum into sustained strength.
“Instead of considering formats like ‘C5+’ or trying to build a dialogue with external geopolitical actors, we need to start an internal dialogue,” he concluded.