Central Asia is projected to achieve growth exceeding 6% in 2025, outpacing developed economies

Central Asia’s Economic Surge in 2025

Central Asia experienced robust economic growth in 2025, with the region’s GDP expanding by over 6% compared to the previous year. Independent assessments place the growth rate between 6.2% and 6.6%, depending on the methodology used. The World Bank estimates a 6.2% increase, while the Eurasian Development Bank (EDB) reports a 6.6% rise. These figures encompass Kazakhstan, Uzbekistan, the Kyrgyz Republic, and Tajikistan, though Turkmenistan is not included due to insufficient data.

This impressive performance stands in stark contrast to the more modest outlook for advanced economies. The EDB anticipates the United States will grow by about 1.6% and the euro area by 1.1% in 2026, while China is projected to see a 4.6% expansion.

Despite these headline numbers, experts highlight ongoing challenges such as inflation, income inequality, and dependence on external factors, which continue to influence the region’s economic landscape.

Kazakhstan: Growth Driven by Oil and Industrial Expansion

Kazakhstan, the largest economy in Central Asia, saw its GDP rise by approximately 5.9% in 2025, with the EDB predicting a 5.5% increase for 2026. This marks the country’s strongest economic performance in over ten years.

The energy sector remains the primary engine of growth, bolstered by higher-than-expected output from the Tengiz oil field. Meanwhile, manufacturing—especially in machinery and metals—has gained traction, with new production facilities opening across the country.

According to Aigul Berdigulova, Senior Analyst at the EDB’s Centre for Macroeconomic Analysis, the positive impact of investment has exceeded earlier expectations. She also notes that government initiatives to diversify the economy have accelerated industrial output this year.

Rising household incomes have fueled demand for mortgages and car loans, and domestic tourism is on the rise. However, officials recognize the limitations of relying solely on energy exports and are investing in new transport links across the Caspian Sea and in processing industries to diversify revenue streams.

Inflation, which hovered around 12.3% last year, continues to erode purchasing power, keeping interest rates elevated and limiting consumer spending.

Uzbekistan: Rapid Growth and Economic Transformation

Uzbekistan posted one of the region’s strongest economic performances, with GDP climbing 7.4% in 2025 and a projected 6.8% increase in 2026, according to the EDB.

The country’s GDP surpassed €133 billion in 2025, a significant jump from roughly €56 billion nine years earlier. During this period, GDP per capita nearly doubled, rising from about €1,750 to €3,220.

Investment in fixed assets grew by over 15% year-on-year during the first nine months of 2025, while export values soared by more than 33%. High global gold prices played a pivotal role, with gold export revenues increasing by over 70% year-on-year, according to data from Uzbekistan’s statistics agency, cited by the World Bank and EDB.

Gulasal Madrahimova, Dean at the Tashkent Institute of Textile and Light Industry, highlighted that the services sector alone now contributes around €72.4 billion to GDP, with digital services becoming increasingly significant. Initiatives like the ‘One Million AI Programmers’ project are helping citizens acquire new skills and boost their incomes.

President Shavkat Mirziyoyev reported that in 2025, about five million people secured stable employment, and 1.5 million moved out of poverty. Consumer activity also increased, with annual home purchases reaching 270,000 and car sales hitting one million.

The World Bank notes that sustaining this momentum will be more challenging in the future. Pınar Yaşar, Country Economist at the World Bank Office for Uzbekistan, emphasized the need for a robust private sector, WTO membership, and a fair competitive environment. Reducing state involvement where private enterprise can excel is seen as key to attracting investment and creating quality jobs.

Kyrgyz Republic and Tajikistan: Fast but Uneven Progress

The Kyrgyz Republic led the region in growth, with GDP estimated to have expanded by 10.3% in 2025 and a forecast of 9.3% for 2026, according to the EDB. Tajikistan also benefited from strong remittance inflows and public investment.

Analysts attribute part of this acceleration to shifts in trade and logistics following Russia’s invasion of Ukraine. Kubat Rakhimov, a regional infrastructure expert, points out that for economies with historically low investment, high growth rates often represent a period of catching up rather than a fundamental transformation.

He notes that while 6% growth is typical for developing economies in a catch-up phase, advanced economies consider 1.5–2% growth to be strong. Rakhimov also stresses that GDP growth alone does not fully reflect improvements in living standards, suggesting that real disposable income and labor productivity are more meaningful indicators of long-term progress.

Azerbaijan: A Strategic Energy and Trade Link

Although not geographically part of Central Asia, Azerbaijan maintains close economic ties with the region through trade and energy infrastructure. In 2025, Azerbaijan experienced more moderate growth, with the International Monetary Fund projecting a 3.0% GDP increase, a slowdown from previous years.

Other organizations offer slightly different forecasts: the World Bank expects 2.6% growth, while the Asian Development Bank predicts 2.4% for 2025.

Despite a slower growth rate compared to some Central Asian economies, Azerbaijan plays a pivotal role in connecting the region to global markets. The country’s economy is heavily dependent on oil and gas exports, which provide fiscal stability but result in more gradual year-to-year changes. Energy revenues are being invested in infrastructure, including new transport corridors across the Caspian Sea that link Central Asia with Europe and Turkey.

These routes have become increasingly important as trade patterns between Asia and Europe evolve, enhancing Azerbaijan’s status as a key transit and logistics hub for Central Asian exports such as hydrocarbons, metals, and agricultural goods. Authorities are also channeling investments into renewable energy and non-oil sectors to diversify the economy and reduce vulnerability to commodity price swings, while maintaining strong ties with Kazakhstan, Uzbekistan, and other Central Asian countries.

Inflation, Income Disparities, and Policy Challenges

Despite rapid overall growth, inflation remains a persistent issue throughout Central Asia. The International Monetary Fund and World Bank estimate that inflation in 2025 stayed high, reaching about 12% in Kazakhstan, 9% in the Kyrgyz Republic, and 7–8% in Uzbekistan.

Evgeny Vinokurov, Chief Economist at the EDB, suggests that easing inflation could pave the way for lower interest rates and more stable national currencies in the region. Until then, high borrowing costs continue to influence household spending, often overshadowing strong GDP growth.

World Bank data also reveal significant income disparities. Kazakhstan’s GDP per capita is around $14,154, compared to approximately $3,162 in Uzbekistan and $2,420 in the Kyrgyz Republic. For context, the United States boasts a GDP per capita exceeding $84,000.

Outlook and Risks Ahead

Economists caution that Central Asia’s current growth momentum is susceptible to external risks, including a potential slowdown in China, fluctuations in global demand for energy and metals, and geopolitical uncertainties.

The World Bank anticipates a sharper slowdown than the EDB, forecasting regional growth of about 5.0% in 2026 and 4.6% in 2027, citing global trade uncertainties and weaker performance among key partners.

For Central Asia, the key challenge will be to convert this period of exceptional growth into lasting improvements in productivity, income, and institutional resilience—ensuring that strong GDP figures lead to tangible benefits in people’s everyday lives.