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Immigration

How the Russian Relocation Wave Reshaped Kazakhstan’s Economy

In September 2022, northern Kazakhstan’s border crossings experienced huge surges as tens of thousands of Russians fled mobilization for the war in Ukraine. In Almaty and Astana, rental prices soared to historic highs, and social infrastructure came under intense pressure. At the time, the influx seemed poised to destabilize the country’s established equilibrium. Two years on, the situation has transformed. The initial surge subsided, and spontaneous migration underwent a natural filtering process. Many who saw Kazakhstan as a temporary stop have moved on or returned to Russia. Those who made a conscious decision to stay have legalized their status and integrated into the local economy. Despite initial fears, the mass relocation did not damage Kazakhstan’s economy. On the contrary, the so-called "Russian exodus" accelerated Almaty and Astana’s evolution into cosmopolitan urban centers, while introducing lasting economic shifts. A New Diaspora Understanding the impact of the mass migration requires distinguishing transient travelers from those who settled. During the peak in autumn 2022, more than 400,000 Russian citizens crossed the border, though most quickly departed Kazakhstan. According to Kazakhstan’s Interior Ministry, from January 2023 to September 2024, more than 80,000 Russian citizens received residence permits for work. Including family members and remote workers, the core of the relocated population can be estimated at 100,000–120,000 people. Those who remained form a skilled urban middle class, IT specialists, engineers, doctors, and entrepreneurs, largely aged 25 to 40. When the “visa run” legal loophole allowing stay extensions by briefly exiting the country was abolished in January 2023, many were forced to legalize their presence. The rule change pushed many relocants to formalize their stay through work contracts or business registration, which in turn made their economic activity more visible to the state. By the end of 2023, the number of registered legal entities with Russian participation exceeded 18,000, a 70% increase. In 2024, that number rose to more than 23,000. The “Cappuccino Effect” The arrival of tens of thousands of solvent consumers brought not only capital, but also the consumption habits of Russia’s megacities. International institutions, including the IMF, have acknowledged that Kazakhstan’s 2023 GDP growth was supported in part by robust domestic demand. Spending surged in restaurants, delivery services, taxis, and gyms, especially in Almaty and Astana. This boost helped small and medium-sized businesses recover from the pandemic. Russian entrepreneurs, opening everything from coffee shops to architecture firms, raised service standards and intensified competition. Local businesses responded by improving their quality and digitalizing operations. However, this also pushed up consumer prices, contributing to inflation and affecting local purchasing power. Housing remains the most visible pressure point. While the panic of late 2022 has passed, rents remain well above pre-crisis levels. Analysts estimate that average house prices are still 40% higher than in 2021. This has fueled gentrification, with central Almaty’s “Golden Square” and elite areas of Astana becoming expat enclaves. Students, public sector workers, and young families have increasingly been pushed to the outskirts, increasing commuting times and straining public transport. Many relocants are...

Economy

IMF: Uzbekistan’s Economy Strong but Reforms Needed to Sustain Momentum

Uzbekistan’s economy remains robust, supported by strong domestic demand, high gold prices, and rising investment, according to the International Monetary Fund (IMF). The assessment was released in an end-of-mission statement following an IMF staff visit to Tashkent from November 17 to 25, led by Yasser Abdih. The IMF reported that real GDP grew by 7.6% year-on-year in the first nine months of 2025, driven by buoyant household consumption and increased investment. Despite sustained demand, inflation has moderated. Headline inflation fell to 7.8% in October, while core inflation eased to 6.6%. This slowdown, the IMF noted, reflects the diminishing impact of last year’s administrative energy price adjustments, a firmer exchange rate, and continued tight monetary policy. Household lending grew rapidly, up 23% in September, though business lending rose more modestly. The external current account deficit narrowed significantly in the first half of 2025, bolstered by high global gold prices, a strong performance in non-gold exports, and steady remittance inflows. International reserves remain “ample,” covering roughly 12 months of projected imports. The IMF forecasts GDP growth to exceed 7% in 2025, tapering to around 6% in 2026. Inflation is expected to gradually decline toward the Central Bank of Uzbekistan’s 5% target by the end of 2027. Overall, the economic outlook is “broadly positive,” with risks described as “largely balanced.” However, the IMF cautioned that stronger-than-expected revenues, particularly from gold exports, could lead to excessive government spending. To avoid overheating the economy, it advised limiting new expenditures, curbing real exchange rate appreciation, and reducing exposure to gold price volatility. The Uzbek government has reaffirmed its commitment to keeping the fiscal deficit below 3% of GDP in both 2025 and 2026. The mission urged authorities to broaden the tax base and raise the tax-to-GDP ratio. It welcomed the government’s planned medium-term revenue strategy and ongoing reforms to reduce the shadow economy and modernize the Tax Committee. Key recommendations include restricting new tax incentives, enhancing audit systems, and publishing annual tax expenditure reports to improve transparency. On monetary policy, the IMF stressed the need to maintain a tight stance to drive inflation down. The Central Bank of Uzbekistan has held its policy rate at 14% since March. The IMF welcomed the country’s move toward greater exchange rate flexibility, introduced in April. The Fund also called for acceleration of financial sector reforms, including phasing out directed and preferential lending programs. It urged the finalization of a comprehensive roadmap to implement the 2025 Financial Sector Assessment Program recommendations. Structural reforms remain critical to sustaining long-term growth. The IMF emphasized the need to continue privatizing and restructuring major state-owned enterprises, improve governance, strengthen market competition, and prepare for World Trade Organization accession, targeted for March 2026. The IMF concluded the mission by thanking Uzbek authorities for their cooperation, noting that the visit will not result in a formal Board discussion. A year earlier, the IMF delivered similarly upbeat projections for Uzbekistan, citing 6.4% GDP growth in the first half of 2024, rising remittances, and solid reserves. However, it...

Economy

Tajikistan to Repay Over $500 Million to Foreign Creditors in 2026

Tajikistan plans to allocate $548 million to repay its principal external debt in 2026, according to the country’s draft state budget. This would be one of the largest annual external debt payments in recent years for the republic. Most of the repayment will be covered directly from the national budget. A portion will also come from state-owned companies and enterprises that previously received sub-loans backed by government guarantees. These entities are now participating in the repayment process. In addition to external debt, Tajikistan’s domestic obligations in 2026 are projected at more than $51 million. Of that amount, $16 million will be serviced from the budget, while the remaining $34.5 million will be financed through the Ministry of Finance’s deposits at the National Bank of Tajikistan, as well as revenue from the sale and lease of assets belonging to the now-liquidated Agroinvestbank and Tajiksodirotbank, both of which have been transferred to state ownership. Despite these substantial repayments, Dushanbe plans to continue attracting foreign financing for development purposes. More than $678 million is earmarked for state investment projects in 2026, with funding to be directed toward the energy, infrastructure, and social sectors. According to the Ministry of Finance, as of October 1, Tajikistan’s total external debt stood at $3.037 billion, down $151 million, or 4.7%, from the beginning of the year. The figures indicate a gradual reduction in the country’s debt burden. The vast majority of the debt, 95.5%, or nearly $2.9 billion, is classified as direct government debt. Debt secured by state guarantees amounts to slightly over $138 million. China remains Tajikistan’s largest creditor, with over $700 million in outstanding loans. Other major lenders include the World Bank, the Asian Development Bank, the Islamic Development Bank, and the European Bank for Reconstruction and Development.

Economy

Most Kazakhstani Citizens Fear Decline in Living Standards Due to Tax Reform

A majority of Kazakhstanis expect a planned increase in value-added tax (VAT) to negatively impact their standard of living, triggering higher prices, rising unemployment, and increased pressure on businesses, according to a survey conducted by the DEMOSCOPE public opinion monitoring agency. The results show that 61.4% of respondents believe the VAT hike from 12% to 16% beginning January 1, 2026, will reduce their quality of life. Of those, 32.4% anticipate a significant decline, while 29% expect a slight deterioration. Meanwhile, 20.6% believe the change will have no impact, and just 9% believe it will improve their living standards. Government officials have framed the VAT increase as necessary to boost budget revenues, stabilize the economy, and finance social spending. However, respondents overwhelmingly believe the reform will primarily benefit the state (63.8%) and wealthy citizens (27.9%). In contrast, only 10.2% think businesses will benefit, while 3.3% expect gains for the middle class and just 2% for low-income citizens. Additionally, 19.2% said no one would benefit, and 2.4% believe everyone will benefit. Respondents also identified several expected negative outcomes. A majority, 65.5%, expect a rise in prices for goods and services. Another 27.3% predict a reduction in the number of small and medium-sized enterprises, 26.5% foresee rising unemployment, and 19.6% anticipate growth in the shadow economy and tax evasion. Among entrepreneurs, 70.5% view the reform negatively. The VAT hike is seen as particularly detrimental to small and medium-sized businesses: 63.6% believe it will harm the sector, 14.8% foresee no impact, and only 10.3% predict a positive outcome. Overall, 52.8% of respondents expressed a negative view of the reform, while 33.4% were neutral and just 7.8% were positive. Nevertheless, some respondents did see potential benefits: 18.2% believe the reform will increase tax revenues, and 9.4% think it will improve living standards. A further 12.6% said they expect no significant changes. The findings suggest that many Kazakhstani citizens view the tax reform as a policy that favors the government and affluent elites, while placing disproportionate pressure on businesses and vulnerable population groups. As previously reported by The Times of Central Asia, in early October, Finance Minister Mady Takiev stated that authorities had identified suspected underreporting of taxable income by more than 260,000 businesses across the country.

Economy

IMF Links High Inflation in Kazakhstan to Overheating Economy

The International Monetary Fund (IMF) has attributed rising inflation in Kazakhstan to signs of an overheated economy. In a mission conducted in early November, the IMF concluded that the country's GDP growth is exceeding its real potential, thereby fueling inflationary pressure. While economic activity remains robust, prices continue to climb. According to the IMF’s forecast, Kazakhstan’s real GDP is expected to grow by just over 6% in 2025, up from 5% in 2024. The main growth drivers are increased oil production and elevated domestic demand. The IMF estimates that inflation could reach nearly 13% by the end of the year. Kazakhstan’s fiscal policy remains expansionary. Transfers from the National Fund are a key contributor: in 2024, more than $12.1 billion was withdrawn from the fund, including $10.8 billion in direct transfers to the republican budget and $1.3 billion for the purchase of shares and bonds of Kazakhstani issuers. In 2025, the government plans to cut withdrawals from the National Fund nearly in half to $5.2 billion. However, the IMF warns that the non-oil budget deficit could still exceed 8% of GDP. Elevated demand, particularly from state-owned enterprises, has also contributed to a widening current account deficit, projected at 4% of GDP. Despite a slowdown in consumer lending and stabilization in oil production, domestic demand is expected to remain high in 2026. The IMF forecasts GDP growth at 4.5%. Over the medium term, the new Tax Code is expected to help bring inflation down to the 5% target, while GDP growth moderates to a sustainable level of around 3.5%. According to the National Statistics Bureau, year-on-year inflation in Kazakhstan stood at 12.9% in September 2025, easing slightly to 12.6% in October. Monthly inflation was reported at 0.5%. The IMF highlighted several risks that could exacerbate inflationary pressures. These include falling oil prices, slower economic growth among key trading partners, potential disruptions to crude exports via the Caspian Pipeline Consortium (CPC), delays in infrastructure projects, and sluggish fiscal consolidation. Nevertheless, Kazakhstan continues to maintain one of the lowest levels of public debt in the world. At 24.8% of GDP, the country ranks 25th globally in terms of debt burden.

Economy

Kyrgyz Authorities Tighten Control Over Meat Prices

Temporary state regulation of meat prices has been in effect in Kyrgyzstan for several months. Inspectors fine sellers who exceed the permissible price caps. The first violation typically results in a warning. The Ministry of Economy and Commerce recently extended the regulation. The price controls were due to expire last week, but officials argue that without oversight, rising meat prices could trigger an increase in the cost of other goods and the broader consumer basket. In Bishkek, the government has set maximum retail prices at $7.50 per kilogram for lamb and $7.70 for beef. Price caps in the regions are slightly lower. According to sellers, rising prices are driven not by profit motives but by external pressures, prolonged drought, higher fuel prices, increased transportation costs, and a surge in meat exports, especially to Uzbekistan. “Meat is indeed becoming more expensive, mainly because it is being exported abroad. We need to provide for ourselves first. When we sell at state-set prices, it becomes unprofitable, we operate at a loss. We still have to pay rent, electricity, patent fees, security, and water,” said Mirlan Tursunaliyev, a meat seller in Bishkek, speaking to The Times of Central Asia. He added that vendors hope the price caps will be revised to better reflect their operational costs. Officials from the Antimonopoly Regulation Service note that some sellers are unwilling to comply with legal requirements such as submitting documents, updating price tags, or paying fines. In some cases, enforcement raids are carried out jointly with police. According to the agency, meat prices in Kyrgyzstan typically rise between May and September. Authorities expect demand to decline toward the end of the year, as is customary in winter. A seasonal drop in demand could also bring down production costs.