According to the Eurasian Development Bank (EDB), Central Asia’s economy grew by about 6.6% in 2025 and is expected to expand by roughly 6.1% in 2026.
This includes data from Kazakhstan, the Kyrgyz Republic, Tajikistan and Uzbekistan, with figures from Turkmenistan not included due to data limitations.
These figures are markedly more optimistic than the forecasts for major advanced economies, with the bank projecting US growth of around 1.6% and euro area growth of about 1.1% in 2026, while China is expected to expand by roughly 4.6%.
Despite the strong headline numbers, many households in Central Asia face rising prices, high borrowing costs and uneven income gains.
Economists note that inflation and monetary tightening often shape people’s day-to-day economic reality more than optimistic national growth figures.
Fast yet uneven growth
Growth across the bloc is accelerating but unevenly. The Kyrgyz Republic has pulled ahead as the region’s fastest-growing economy, with the EDB estimating 10.3% growth in 2025 and forecasting 9.3% in 2026.
Uzbekistan follows with 7.4% in 2025 and a projected growth of 6.8% in 2026.
Kazakhstan’s economy is expected to expand by about 5.9% in 2025 and 5.5% in 2026. The figures would mark the strongest growth in more than a decade across the region.
Kubat Rakhimov, a Kyrgyz expert in infrastructural development in Central Eurasia, argues that for underinvested economies, growth of around 6% often reflects a catch-up phase, while in advanced economies growth of 1.5-2% can already be considered strong.
He adds that GDP growth is an incomplete metric for well-being, noting that real disposable income and labour productivity are better indicators of actual living standards.
Per-capita reality check
Economists caution against comparing growth rates without considering economic size. Central Asia’s combined population is about 80 million, far smaller than that of major global regions.
In addition, according to the most recent data from the World Bank, Kazakhstan’s GDP per capita stood at about $14,154 (€12,107) compared to roughly $3,162 (€2,704) in Uzbekistan and around $2,420 (€2,070) in the Kyrgyz Republic.
By comparison, GDP per capita in the United States was about $84,534 (€72,313), while China stood at approximately $13,303 (€11,379).
These gaps help explain why rapid headline growth in Central Asia does not automatically translate into living standards comparable to those of larger or more developed economies, even as incomes in the region continue to rise.
Inflation eats into growth figures
For many households, the gains from faster growth have been eroded by inflation. Last year, price increases outpaced GDP growth in Kazakhstan, with inflation running at around 12.3%. Inflation stood at about 9.1% in the Kyrgyz Republic and roughly 7.5% in Uzbekistan.
“Lower inflation will create conditions for interest rate cuts. We also expect most national currencies in the region to demonstrate broadly stable dynamics,” said Evgeny Vinokurov, Chief Economist at the EDB.
Until then, inflationary pressure keeps interest rates painful. Kazakhstan’s key policy rate is hovering around 18% compared to roughly 14% in Uzbekistan and 11% in the Kyrgyz Republic.
Why Kyrgyzstan leads the region
Analysts say part of Central Asia’s recent GDP growth has been underpinned by the redirection of trade and logistics flows, particularly in smaller economies.
Kyrgyzstan’s strong headline numbers, they argue, reflect a reconfiguration of supply chains triggered by Russia’s full-scale invasion of Ukraine.
Kubat Rakhimov links the country’s unusually rapid growth to these structural shifts, saying Kyrgyzstan “fitted almost perfectly” into the economic standoff between Russia and the West.
“We have traditionally been engaged in re-exporting goods from China to the Russian market. This was a very strong niche for us,” Rakhimov said.
“When additional trade flows had to be redirected, it did not require building new systems — the logistics and financial channels were already in place,” he added.
Trade redirection, combined with the nationalisation of the Kumtor gold mine, which now keeps a higher percentage of the revenue in the country, has strengthened public finances and enabled higher infrastructure spending.
That also produced a short-term multiplier effect in construction and transport.
Rakhimov cautions, however, that these drivers are inherently cyclical: growth built on geopolitical tension remains vulnerable to external shifts.
At the same time, EDB data show the expansion has been driven mainly by domestic factors, particularly consumption and investment. Strong internal demand, rapid credit growth and large infrastructure projects have played a central role.
What is driving the expansion in Kazakhstan and Uzbekistan?
In the region’s larger economies, growth is being driven more by industrial investment.
Kazakhstan has seen a boost from manufacturing, particularly machinery, and the energy sector.
A crucial factor was the earlier-than-expected launch of expanded capacities at the Tengiz oil field, which is why the forecast was revised upward this year.
“This is primarily due to the fact that the impact of unlocking investment potential turned out to be stronger than we had anticipated back in June,” said Aigul Berdigulova, Senior Analyst at the EDB’s Centre for Macroeconomic Analysis.
“In addition, industrial output has been growing rapidly this year, largely as a result of government measures aimed at diversifying the economy,” she continued.
Uzbekistan’s expansion appears broader-based. Investment in fixed capital rose by 15.2% year-on-year in the first nine months of 2025, while exports surged 33.3% in value.
Persistently high gold prices played a major role, pushing the country’s export revenues from the precious metal up by 70.5%.
Risks and a narrow window
Despite the optimism, economists see significant headwinds.
The World Bank forecasts a sharper slowdown than the EDB, predicting regional growth will cool to about 5.0% in 2026 and 4.6% in 2027.
They cite vulnerabilities linked to slower growth among trading partners and continuous uncertainty and disruption in global trade.
Analysts warn the current boom could fade under several scenarios, including a global economic crisis, an end to active hostilities between Russia and Ukraine, or a shift in global demand for hydrocarbons and metals.
In such cases, the “geopolitical rent” currently enjoyed by Central Asia could evaporate. The challenge, Rakhimov argues, is to turn temporary momentum into lasting strength.
“Instead of looking at formats like ‘C5+’ or trying to build a dialogue with external geopolitical actors, we need to start an internal dialogue,” he concluded.
