EBRD Projects Strong Economic Growth in Central Asia

The latest edition of the European Bank for Reconstruction and Development’s (EBRD) Regional Economic Prospects report projects robust short-term economic growth for Central Asia. The region’s GDP is expected to grow by 5.1% in 2024, accelerating to 5.9% in 2025, driven by stronger commodity revenues, infrastructure investment, and market-oriented reforms.

Despite challenges such as extreme weather, including severe flooding in Kazakhstan and livestock losses in Mongolia, Central Asia’s economies have shown resilience. The report highlights sustained remittance inflows, rising wages, and growing international tourism as key contributors to economic expansion. In the first half of 2024, these factors spurred growth in the hospitality and services sectors.

Central Asian governments are also prioritizing the development of transport, logistics, and energy infrastructure, which has positively impacted regional GDP. The Kyrgyz Republic and Tajikistan were singled out for particularly strong economic growth.

Kazakhstan, the region’s largest economy, saw its growth driven by trade, transport, warehousing, services, and IT sectors in early 2024. The EBRD forecasts a 4.0% economic expansion in 2024, with growth potentially reaching 5.5% in 2025, buoyed by public spending and the expansion of the Tengiz oil field.

The Kyrgyz Republic’s tourism sector is booming, leading to a 9% GDP growth forecast for 2024, although this is expected to moderate to 7% in 2025. Growth in the country is being supported by rising remittances, increased infrastructure investment, and silver and gold exports.

In Mongolia, extreme weather conditions caused significant livestock losses, hampering agricultural growth. However, foreign tourism, along with strong performance in mining and manufacturing, drove GDP growth, which the EBRD predicts will reach 5% in 2024 and 8% in 2025.

Tajikistan’s economy is benefitting from hikes in public-sector salaries and infrastructure investments, with GDP growth forecasted at 8% in 2024 and 7% in 2025. However, fluctuations in remittances from Russia remain a downside risk.

Turkmenistan’s stable economic outlook continues, with growth of 6.3% forecast for both 2024 and 2025, driven by public infrastructure projects and improvements in customs efficiency.

Uzbekistan’s economy is expected to grow by 6% in 2024 and 2025, supported by remittances, tourism, and ongoing market reforms. However, an energy deficit may pose a challenge to sustained growth.