Central Asia Sees Strong Economic Growth, but Inflation Remains a Concern

The EDB said the region’s economy expanded by about 6.6% in 2025 and is forecast to grow around 6.1% in 2026. The figures cover Kazakhstan, the Kyrgyz Republic, Tajikistan and Uzbekistan, while Turkmenistan was excluded due to data limitations.

The growth outlook compares favourably with advanced economies. The bank expects the United States to grow by around 1.6% in 2026 and the euro area by about 1.1%, while China’s economy is projected to expand by roughly 4.6%.

Despite strong headline growth, economists note that rising prices and high interest rates are limiting the impact on living standards across the region.

Uneven growth across countries

Growth varies significantly among Central Asian economies. The Kyrgyz Republic is expected to lead the region, with growth estimated at 10.3% in 2025 and 9.3% in 2026.

Uzbekistan is projected to grow by 7.4% in 2025 and 6.8% next year, while Kazakhstan is forecast to expand by 5.9% in 2025 and 5.5% in 2026.

Economists say faster growth in smaller economies often reflects a catch-up phase rather than sustained long-term expansion.

Income gaps remain wide

Per-capita income levels across Central Asia remain well below those in advanced economies. According to the World Bank, Kazakhstan’s GDP per capita is around $14,154, compared with $3,162 in Uzbekistan and $2,420 in the Kyrgyz Republic.

By comparison, GDP per capita in the United States exceeds $84,000, while China’s stands at roughly $13,300.

Inflation offsets gains

Inflation continues to reduce the benefits of growth for households. In 2025, inflation reached about 12.3% in Kazakhstan, 9.1% in the Kyrgyz Republic, and 7.5% in Uzbekistan.

High inflation has kept interest rates elevated. Kazakhstan’s policy rate remains near 18%, compared with about 14% in Uzbekistan and 11% in the Kyrgyz Republic.

The EDB said easing inflation would allow interest rates to fall and support economic stability.

Trade shifts support growth

Analysts say part of the region’s recent expansion has been supported by changes in trade and logistics following Russia’s invasion of Ukraine. The Kyrgyz Republic has benefited from redirected trade flows, particularly re-exports between China and Russia.

In Kazakhstan, growth has been supported by manufacturing and the energy sector, including expanded production at the Tengiz oil field. Uzbekistan has seen strong investment growth and higher export revenues, supported by elevated gold prices.

Risks ahead

Despite current momentum, economists warn of risks from weaker global growth and geopolitical uncertainty. The World Bank expects regional growth to slow in 2026 and 2027 as external conditions become more challenging.