Economic Growth - The Times Of Central Asia

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Kyrgyzstan Reports Strong Economic Growth in Early 2025

Kyrgyzstan’s economy continued its upward trajectory in the first quarter of 2025, with GDP expanding by 13.1%, according to Prime Minister Akylbek Japarov. He credited the surge to positive developments across all key sectors prioritized by the government. The food industry posted remarkable growth of 71%, while the construction sector expanded by 69%. Investments in fixed capital jumped by 90% during the same period. A detailed economic overview published by the Ministry of Economy and Commerce highlighted that Kyrgyz businesses are adapting rapidly to shifting external conditions. The ministry also pointed to increased domestic demand and investment activity as key drivers of growth. "From January to March 2025, about 93% of total investments were directed toward mining, processing industries, information and communications, electricity and gas supply, and the construction of housing and educational institutions," the ministry stated. The construction sector alone contributed three percentage points to GDP growth. However, services remain the backbone of Kyrgyzstan’s economy, accounting for 4.5 percentage points of overall growth. Within the sector, trade made up 27.4%, transportation services 10.3%, and financial intermediation and insurance services another 10.3%. Annual inflation stood just below 7% in the first quarter, with average prices for consumer goods rising by 3.5% during the reporting period.

Tajikistan Economic Growth Asian Development Bank Forecast

ADB Forecasts Steady Economic Growth for Tajikistan Through 2026

The Asian Development Bank (ADB) projects that Tajikistan will sustain strong economic growth over the next two years, according to the bank’s Asian Development Outlook 2025 released in April. Robust Growth Ahead Tajikistan’s gross domestic product is forecast to grow by 7.4% in 2025 and 6.8% in 2026. This growth is expected to be fueled by significant investments in the energy and industrial sectors, solid domestic demand, and an increasingly dynamic private sector. While these figures mark a slight decline from the impressive 8.4% GDP growth recorded in 2024, one of the highest in the region, the ADB highlights the need for deeper structural reforms. In particular, digital transformation and the expansion of e-governance are deemed critical to ensuring long-term, sustainable development. Digital Transformation: Opportunities and Hurdles ADB’s Resident Representative in Tajikistan, Ko Sakamoto, emphasized the strategic importance of digitalization. “We welcome the government’s prioritization of digital transformation as a key driver of development. We stand ready to support efforts to overcome persistent barriers, including a lack of investment,” he said. Despite widespread mobile phone usage, Tajikistan ranks 139th globally in mobile internet speed. However, digital engagement is on the rise: in the first half of 2024, the number of registered digital wallets hit 10.4 million, and non-cash transactions rose 16.2% year-on-year. ADB experts recommend that Tajikistan focus on developing a robust digital infrastructure to broaden access to public services. The widespread integration of digital technologies in governance and business is seen as vital to industrial modernization and improving overall quality of life. Inflation, meanwhile, is projected at 5.0% in 2025 and 5.8% in 2026. Key inflationary pressures include rising consumer lending, salary increases for public sector employees, and higher utility tariffs. Continued Partnership and Support The Asian Development Bank, a major multilateral financial institution supporting sustainable and inclusive development across Asia and the Pacific, has been working with Tajikistan since 1998. Over that time, the country has received more than $2.7 billion in assistance, including $2.2 billion in grants. These funds have supported vital infrastructure projects in transportation and energy, as well as climate resilience and social development programs. Established in 1966, ADB has 69 member countries, 49 of which are from the region. The bank continues to be one of Tajikistan’s principal development partners, offering innovative financing tools and strategic cooperation to enhance economic sustainability and improve livelihoods.

Economy Economic Growth GDP opinion Economist

Kyrgyzstan’s Economic Boom or Bust? Calls for Inclusive Growth Persist

Kyrgyz President Sadyr Japarov declared late last year that the country’s economic growth had reached historic milestones, with GDP maintaining positive momentum. However, local economists remain skeptical about the broader impact of this growth. In 2020, Kyrgyzstan’s GDP stood at 639 billion KGS ($7.3 billion), according to official data. By the end of 2025, this figure is projected to reach 1.8 trillion KGS ($22 billion). Growth Without Inclusion In an interview with The Times of Central Asia, economist Nurgul Akimova acknowledged that the reported 9% GDP growth and the so-called “leopard’s leap” frequently mentioned by the government are positive developments. However, she stressed that for economic expansion to be meaningful for ordinary citizens, it must be inclusive. "Nine percent growth is not inclusive because it does not create additional jobs. The main drivers of our economic growth are construction, downstream industries, and the financial sector. These sectors do not contribute to improving human capital. In construction, for instance, a significant portion of costs goes toward imported building materials," Akimova explained. According to Akimova, Kyrgyzstan’s economy has followed an inertia-driven trajectory for the past 30 years, avoiding major shocks but also failing to achieve significant breakthroughs. She pointed out that if the garment sector were growing, it would have a greater impact, as it did 15 years ago when Kyrgyz-made clothing was exported to neighboring countries. "For example, a seamstress spends her income on education, healthcare, and consumption. By doing so, she contributes to the development of other inclusive sectors, benefiting society as a whole," Akimova said, adding that while the economy is expanding, it is not improving the welfare of citizens. A People-Centered Economy Akimova emphasized that economic policy should prioritize people’s wellbeing, as failure to do so could erode public trust in the government. She also criticized official comparisons of Kyrgyzstan’s economic growth with other countries, arguing that such assessments lack context. "Officials claim Kyrgyzstan is growing faster than others, but an economy that produces microchips and one that manufactures T-shirts are fundamentally different. These industries require distinct investment levels, equipment, and human capital." Kyrgyzstan’s economy is currently valued at approximately $14 billion. If the country were to sustain an annual 10% growth rate, as authorities suggest, GDP would increase by $1.4 billion per year. Akimova highlighted that this figure represents only 0.5% of Kazakhstan’s economic growth, 0.06% of Russia’s, and a mere 0.0006% of the United States’ GDP expansion. "When we hear claims that we are growing faster than others, we must consider the scale and complexity of economic processes," the economist concluded.

Economy Government Economic Growth Economic Diversification

Kasymaliyev: Kyrgyzstan to Focus on Hydropower and Economic Growth

As a small, landlocked country in the heart of Central Asia, Kyrgyzstan is prioritizing the expansion of its hydropower potential, enhancing transit opportunities, and digitalizing public administration, Chairman of the Cabinet of Ministers Adylbek Kasymaliyev said at the World Governments Summit in Dubai, United Arab Emirates, on February 11. According to Kasymaliyev, Kyrgyzstan’s position as an "upstream country" in the region largely shapes its water policy. The country’s total hydropower potential is estimated to exceed 140 billion kilowatt-hours per year. While Kyrgyzstan’s abundant water resources meet domestic needs, they also supply irrigation water to large farmland areas in downstream Central Asian countries such as Kazakhstan and Uzbekistan. Hydropower and Regional Energy Cooperation Kyrgyzstan’s flagship project in the water and energy sector is the construction of the Kambarata-1 hydroelectric power plant on the Naryn River, in partnership with Kazakhstan and Uzbekistan. Once completed, the plant is expected to generate 5.6 billion kilowatt-hours of electricity annually, meeting domestic demand while also enabling the export of surplus clean energy to neighboring countries. Transport and Trade: China-Kyrgyzstan-Uzbekistan Railway Another major infrastructure initiative highlighted by Kasymaliyev is the China-Kyrgyzstan-Uzbekistan railway, which broke ground in December 2024. More than just a transport corridor, the railway is seen as a strategic link connecting East and West. The route will facilitate the movement of goods from China to Kyrgyzstan and onward to Central Asia, the Middle East - including Turkey - and the European Union. “The project will strengthen interregional ties, help diversify transport routes, and enhance the region’s competitiveness as an international transport and transit hub, benefiting all Central Asian countries,” Kasymaliyev said. Digital Transformation and AI in Governance Kyrgyzstan’s third priority is digital transformation, aimed at reducing bureaucracy and lowering the cost of public services for citizens and businesses. “We are on the threshold of a new era of public administration, where digital transformation, artificial intelligence, and big data are not just tools but the foundation for making balanced and strategically sound decisions,” Kasymaliyev stated. He emphasized that AI offers unprecedented opportunities to improve governance efficiency. “Today, decisions worldwide are based on objective analysis of vast amounts of data. If we can assess the impact of fiscal reforms, energy tariff changes, or investment programs in advance, we can minimize risks, enhance economic resilience, and make truly well-informed decisions,” he said, adding that Kyrgyzstan is eager to adopt best practices from international partners.

Agriculture South Korea Fishery Economic Growth

Kyrgyzstan Builds National Center for Aquaculture and Fisheries Development

Construction of Kyrgyzstan’s National Center for the Development of Aquaculture and Fisheries is underway in the village of Bokonbaevo on the southern shore of Lake Issyk-Kul. The project is a joint initiative of the Kyrgyz Ministry of Water Resources, Agriculture, and Processing Industry and the Korea Maritime Institute. The center will provide training in fish farming technologies for farmers, students, and researchers. According to the ministry, a well has been drilled to a depth of 180 meters, and pumping equipment and water purification systems have been installed to supply water for the center’s incubation workshop. The facility is scheduled for completion by December 2026. It will include fish incubation workshops, laboratories, residential quarters, a canteen, and other necessary infrastructure. The center is designed to boost Kyrgyzstan’s fishing industry. Currently, the country produces about 30,000 tons of fish annually, of which only 5,000 tons are exported. However, experts estimate that Kyrgyzstan has the capacity to produce up to 105,000 tons and export 50,000 tons of fish. According to official statistics, in 2023, Kyrgyzstan produced 33,600 tons of fish and exported 5,556 tons of fish and fish products, mainly to Russia, Kazakhstan, Uzbekistan, and Lithuania. Fish farming in Kyrgyzstan, particularly trout production, is carried out in artificial ponds and fishery farms at lakes Issyk-Kul and Son-Kul.

Economy Macroeconomic review Socio-Economic Development World Bank Economic Growth

Central Asia’s Economic Growth to Reach 5% in 2025

The World Bank’s Global Economic Prospects report offers projections for economic growth, risks, and challenges across Europe and Central Asia (ECA), highlighting mixed outcomes for the region as a whole. Regional Outlook Economic growth across ECA is projected to slow to 2.5% in 2025, with a modest recovery to 2.7% expected in 2026. This deceleration is largely attributed to weaker economic activity in Russia and Turkey, two key regional economies. Excluding these two countries and Ukraine, growth in the rest of the region is forecasted to average 3.3% in 2025-2026. The recovery in these areas will primarily be driven by private consumption and investment, as inflationary pressures ease and monetary policies gradually become less restrictive. Despite these projections, significant risks remain. Global policy uncertainty and potential changes in trade policies could negatively affect trade flows, capital investments, and economic growth. Geopolitical tensions - particularly stemming from Russia’s invasion of Ukraine - and persistent inflation in the region could also pose serious challenges to stability. Central Asia: A Bright Spot Central Asia is expected to outperform the broader ECA region, with growth projected to accelerate to 5% in 2025 before softening to 4.2% in 2026. This growth will be driven by increased oil production in Kazakhstan, which will serve as a critical engine of recovery for the region. Remittances will also continue to play a key role, particularly for Kyrgyzstan and Tajikistan. These inflows provide vital support to household consumption and help improve current account balances. However, international sanctions on Russia and financial restrictions on cross-border transfers could push some remittance flows into informal channels, potentially limiting their economic impact. Long-Term Challenges While short-term recovery appears promising, the ECA region’s long-term growth potential remains subdued. Between 2022 and 2030, annual growth is projected to average just 3.0%, down from 3.6% in the previous decade. Several factors contribute to this slowdown, including labor shortages caused by low workforce participation rates, aging populations, and significant emigration, particularly from the Western Balkans. Education remains a critical area for improvement. Although ECA boasts relatively strong educational systems, issues such as declining quality in higher education and ongoing brain drain have hindered human capital development. Addressing these issues and improving education systems could help the region move closer to high-income economies in the long term. Conclusion While Central Asia’s projected growth for 2025 presents an optimistic outlook, the region - and ECA as a whole - faces significant headwinds. Structural challenges, geopolitical instability, and demographic pressures will require governments to adopt forward-looking policies to sustain growth and promote resilience. As inflation cools and monetary policies ease, targeted investments in education and workforce development could unlock new opportunities for long-term economic stability.