Economic Growth - The Times Of Central Asia

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Economy

Uzbekistan’s Economy to Remain Strong in 2026, IMF Forecasts 6.8% Growth

The International Monetary Fund (IMF) has released its latest assessment of Uzbekistan’s economy, reporting strong growth in 2025 alongside recommendations for continued fiscal discipline and structural reforms. According to the IMF, Uzbekistan’s real GDP grew by 7.7% in 2025, driven by robust domestic consumption and investment. Growth was broad-based, with the services and construction sectors expanding the fastest. At the same time, the unemployment rate declined to 4.8%, down 0.7 percentage points from the previous year. Inflation showed a downward trend, with annual consumer price growth falling to 7.3% by the end of 2025, compared to 9.8% a year earlier. The IMF attributed this to the fading impact of energy price increases introduced in May 2024, a stronger national currency, and what it described as an “appropriately tight monetary policy stance.” Core inflation also declined over the same period. External balances improved. The current account deficit narrowed to 3.9% of GDP, supported by strong exports and remittance inflows. International reserves remained stable, covering around 13 months of imports, while the fiscal deficit fell to 2.1% of GDP, below the government’s 3% target. “The economic outlook remains favorable,” the IMF said, while pointing to increasing global uncertainties, particularly linked to geopolitical tensions and the conflict in the Middle East. Economic growth is projected at 6.8% in 2026, before moderating to around 6% in 2027. Inflation is expected to remain above the Central Bank’s 5% target in 2026, partly due to higher global oil prices, before easing toward the target level in 2027. The IMF stressed that monetary policy should remain focused on price stability, noting that the policy rate has been held at 14% since March 2025. The report also highlighted risks related to global economic conditions, including trade disruptions and commodity price volatility, as well as domestic challenges such as potential pressure for increased public spending and vulnerabilities linked to state-owned enterprises. The IMF recommended limiting additional government spending in 2026 to avoid fuelling inflation. It also called for targeted social support measures instead of broad subsidies, alongside continued reforms in tax policy, public financial management, and state-owned enterprises. Further recommendations included accelerating the privatisation of state-owned banks, strengthening financial sector oversight, and improving governance standards. The IMF also emphasised the importance of maintaining exchange rate flexibility to help the economy absorb external shocks. The findings build on last year’s IMF assessment, which reported 7.6% growth in the first nine months of 2025, also driven by strong consumption and investment, while inflation showed signs of easing.

Economic Growth

Why Strong Economic Growth in Central Asia Masks Underlying Risks

Central Asian countries are significantly outperforming the global average in GDP growth, largely due to differing economic models across the region. However, rapid expansion does not remove deep structural vulnerabilities. As early as March, data showed that the combined economies of Central Asian countries grew by nearly 7% in 2025 compared to the previous year. The World Bank estimates regional growth at 6.2%, while the Eurasian Development Bank (EDB) places it at 6.6%. These calculations include Kazakhstan, Uzbekistan, Kyrgyzstan, and Tajikistan; Turkmenistan is excluded due to limited statistical transparency. By comparison, growth rates in advanced economies are much lower. The EDB expects around 1.6% growth in the U.S. and approximately 1.1% in the eurozone in 2026, while China’s economy is projected to expand by about 4.6%. Nevertheless, experts note that the region’s economic outlook remains complicated by high inflation, income inequality, and continued dependence on external factors. Investment activity and domestic demand have been the key drivers of growth, according to the EDB. Kazakhstan recorded its highest growth in 13 years (6.5%), with industry leading the expansion: mining grew by 9.4% and manufacturing by 6.4%. In 2026, the non-resource sector is expected to play a greater role. Kyrgyzstan has led the region in GDP growth for the third consecutive year: GDP grew by 11.1% in 2025 and by 9% in January 2026. In Uzbekistan, GDP increased by 7.7% in 2025 (up from 6.7% a year earlier), supported by investment, trade, services, and construction. Tajikistan’s GDP rose by 8.4% in 2025, matching the previous year’s performance. Growth continues to be driven by expanding industrial production and strong domestic demand. Early 2026 data suggest this momentum is holding. Uzbekistan’s Record In April, the World Bank highlighted Uzbekistan’s resilience to external challenges and strong growth dynamics. According to its updated report, the country’s 2025 GDP growth was revised upward by 1.5 percentage points to 7.7%. The outlook is 6.4% for 2026 and 6.7% for 2027. Key drivers include high global gold prices, investment inflows, expanded lending, and ongoing structural reforms. Rising household incomes have also played an important role, supported by remittances, which increased by 37% last year to reach $18.9 billion. By the end of 2025, Uzbekistan ranked among the fastest-growing economies in developing countries in Europe and Central Asia, alongside Kyrgyzstan and Tajikistan. The region as a whole is experiencing its highest growth rates in 14 years. At the same time, analysts point to persistent structural constraints, including a large public sector and the dominance of state-owned enterprises, which hinder private sector development. External risks, including geopolitical instability and potential disruptions in energy and fertilizer supplies, remain significant. In 2025, Uzbekistan’s GDP exceeded €133 billion, compared to approximately €56 billion nine years earlier. Over the same period, GDP per capita rose from about €1,750 to around €3,220, nearly doubling average income levels. Investment in fixed capital increased by more than 15% year-on-year in 2025, while export value grew by over 33%. Persistently high global gold prices played a major role: export...

Economy

IMF Warns of Risks for Rapidly Growing Kyrgyz Economy

Kyrgyzstan continues to record strong economic growth and rising per capita income. At the same time, elevated inflation above the National Bank’s 5%-7% target range, rapid credit expansion, strong wage growth, and high liquidity point to signs of economic overheating, requiring timely macroeconomic policy adjustments. These are the key points of an International Monetary Fund (IMF) statement following consultations with Kyrgyz authorities in Bishkek between March 18 and April 1. The IMF noted that after recording fiscal surpluses between 2023 and 2025, the overall fiscal balance is projected to shift into deficit in 2026, reflecting higher public-sector wages and increased capital spending. The mission also emphasized that monetary policy should remain focused on bringing inflation back within the National Bank’s target range. Strengthening the central bank’s independence and governance remains critical to safeguarding price stability. Repeated transfers of National Bank profits to the state budget, while capital remains below statutory thresholds, risk undermining institutional credibility and the effectiveness of monetary policy. The IMF urged the authorities to uphold the provisions of the constitutional law governing the National Bank and to suspend regular profit transfers until capital is adequately restored. According to the IMF, Kyrgyzstan’s banking sector is stable, well capitalized, and liquid. However, nonperforming loans remain elevated, and rapid credit growth could increase vulnerabilities if macroeconomic conditions deteriorate. The mission stressed that structural reforms remain essential to support sustainable and inclusive growth. These should focus on strengthening governance, reducing the state’s role in the economy, and fostering private-sector-led development. Key priorities include reforming state-owned enterprises, improving the business environment and competition, strengthening the rule of law and anti-corruption efforts, and addressing informality and labor market rigidities. According to the National Statistical Committee, Kyrgyzstan’s gross domestic product (GDP) grew by 11.1% in 2025, while inflation reached 9.4%. The government aims to sustain economic growth under the National Development Program through 2030, targeting average annual GDP growth of 8%, total GDP of at least $30 billion, and GDP per capita of $4,500. The Asian Development Bank (ADB) also forecasts continued strong growth, projecting GDP expansion of 8.9% in 2026 and 8.4% in 2027, following 11.1% growth in 2025. Growth is expected to moderate as construction and trade normalize, although domestic demand will remain the main driver, supported by resilient remittance inflows and sustained investment under the National Development Program. ADB projects inflation to rise to 10.3% in 2026 before easing to 8.5% in 2027, driven by strong domestic demand and planned increases in electricity and heating tariffs. Concerns about overheating are not new. A July 2025 meeting at the Kyrgyz Ministry of Economy and Commerce highlighted structural imbalances, including a widening gap between income growth and labor productivity, rising inflation, labor shortages, increased public spending, and rapid growth in consumer lending. Economist Azamat Akeneev told 24.kg that sustainable growth is not possible without improvements in labor productivity and exports. “If the economy grows through consumption and government spending rather than competitiveness and expansion into foreign markets, sooner or later an adjustment phase...

Economic Growth

ADB Growth Forecast Points to Strong Expansion in Tajikistan

Asian Development Bank (ADB) forecasts that Tajikistan’s economy will maintain strong growth over the next two years, driven primarily by industrial expansion and the services sector. In its latest Asian Development Outlook (April 2026), the bank projects that gross domestic product will grow by 7.3% in 2026 and 6.8% in 2027. This follows an estimated 8.4% expansion in 2025, indicating a slight moderation but continued robust performance. ADB attributes the outlook to improving industrial competitiveness and rising value-added production, which are expected to support long-term economic development and job creation. “Tajikistan’s strong growth opens up opportunities to accelerate job creation,” said Ko Sakamoto, ADB country director for Tajikistan. “By developing competitive, value-adding industries from food processing and textiles to mineral products, the country can translate growth into more and better jobs.” At the same time, inflation is projected to rise to 4.0% in 2026 and 4.5% in 2027. According to ADB, this increase will be driven by stronger consumer lending, remittance inflows, higher public sector wages, supply chain pressures, and adjustments to utility tariffs. The bank noted that the outlook remains subject to revision given the uncertain regional environment. Despite recent gains, ADB cautioned that Tajikistan’s economic structure remains vulnerable. While industrial output has grown, the country continues to depend heavily on a narrow range of products. Exports are dominated by raw materials and low- to mid-level processed goods, with higher value-added manufactured products accounting for less than 10% of total merchandise exports. To address these challenges, the report recommends a broader, ecosystem-based industrial policy. This would involve support for specific sectors, along with improvements in infrastructure, workforce skills, access to finance, and the overall business environment. ADB’s earlier assessments highlight mixed socioeconomic trends. While poverty has declined significantly from 30.9% in 2020 to 19.9% in 2024, inequality and structural constraints continue to pose challenges to long-term development.

tourism industry

Kyrgyzstan Earned Almost $1.1 Billion from Tourism in 2025

Kyrgyzstan’s tourism industry continued to expand in 2025, remaining an important contributor to the country’s economic growth. According to the National Statistical Committee, revenue from foreign visitors reached $1.098 billion in 2025, up from $1.016 billion in 2024. Tourism accounted for 3.8% of GDP, compared to 3.6% the previous year. At the same time, Kyrgyz citizens spent $564 million on travel abroad. As of January 1, 2026, the country had 148,100 registered tourism-related businesses. Revenue from passenger transportation serving tourists across all modes of transport totaled nearly 17.3 billion soms (approximately $197 million), compared to 16.9 billion soms in 2024. Kyrgyzstan’s main tourist attractions include Lake Issyk-Kul and its mountain ski resorts, with the largest and most popular located in Karakol. In recent years, more than 95% of foreign tourists have come from neighboring Central Asian countries and Russia. According to the Tourism Development Fund, most visitors arrive from Uzbekistan, followed by Kazakhstan and Russia. At the same time, the number of tourists from Arab and European countries, as well as from China, India, and the United States, has been steadily increasing.

world trade organization

Turkmenistan Steps Up Preparations for WTO Membership Amid Economic Growth

Turkmenistan is intensifying efforts to integrate into the global trading system, with officials reaffirming the country’s intention to move towards membership in the World Trade Organization (WTO). The announcement was made by Deputy Minister of Finance and Economy Perhat Yagshiyev during the forum “Investing in Turkmenistan’s Future,” according to local media reports. Yagshiyev said the accession process is progressing in a structured manner. A draft memorandum on the country’s foreign trade regime has been prepared, while WTO standards are being introduced gradually in cooperation with the organisation’s Secretariat and international partners. Authorities also point to positive macroeconomic trends. Official data indicate that Turkmenistan’s gross domestic product exceeded $77.4 billion in 2025, reflecting growth of 6.3%. Investment volumes reached more than $12.8 billion, up 6% year-on-year, while inflation reportedly declined to 3.2%. External debt remains below 3% of GDP, and officials say the country has not recorded domestic public debt since January 2022. Foreign trade turnover rose by 10.3% to $21.8 billion. The oil and gas sector, petrochemicals, energy, construction and agriculture continue to be highlighted by the government as priority areas for foreign investment. Transport infrastructure development remains a central component of economic policy. Turkmenistan is participating in several international logistics initiatives, including the Trans-Caspian corridor, the North-South transport route and the Lazurite corridor. The third phase of the Ashgabat-Turkmenabat highway is expected to be completed in 2026, which authorities say will strengthen the country’s role as a regional transit hub. Preparations for WTO accession are also linked to the modernisation of trade procedures. Galina Romanova, a representative of the Ministry of Finance and Economy, previously stated that improving trade facilitation is a key priority. “We are taking consistent steps to modernise customs procedures and introduce digital solutions that make trade faster and more transparent,” she said. Turkmenistan was granted observer status in the WTO on July 22, 2020, following a decision by the organisation’s General Council in Geneva.