Forecast - The Times Of Central Asia

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Inflation

Kyrgyzstan Drafts $419 Million Plan to Curb Rising Prices

Kyrgyzstan has drafted a plan worth about $419 million to curb rising prices in 2026–2027. The authorities aim to increase food production and build reserves, but fuel imported primarily from Russia remains a major source of inflationary pressure largely beyond the government’s control. The draft was presented to the Cabinet on August 21. During the first seven months of 2026, consumer prices and tariffs in Kyrgyzstan rose by 6.7% from their December 2025 level. Average annual inflation over the same period was 10.7%. Food prices rose particularly sharply, with fresh fruit up 16% and meat products 14.5%. Lamb recorded the largest increase at 23.1%. Horse meat rose by 16%, while beef increased by 14.2%. The authorities have already intervened directly in the meat market. In March, Kyrgyzstan introduced a six-month ban on livestock exports. Temporary state controls on beef and mutton prices also applied earlier this year but expired on May 2. The plan calls for increasing the productive livestock population by at least 20,000 head. Agribusinesses will be eligible for preferential loans, while the dairy and poultry sectors will receive subsidies. Storage facilities with a combined capacity of 18,000 metric tons are planned in all seven regions. Farmers are to receive 68,000 metric tons of seed and the necessary amounts of mineral fertilizer. The government also intends to ensure sufficient wheat supplies for the domestic market and purchase another 20,000 metric tons from local producers for state reserves. The draft would establish direct supply channels for agricultural products and expand the network of retail outlets operating without intermediaries. Kyrgyzstan relies on imports for almost all of its petroleum products. Deputy Energy Minister Nasipbek Kerimov said in July that Russia had supplied about 95% of the country’s annual fuel needs in recent years, with total consumption of around 2 million metric tons. This summer, Russia’s fuel shortages worsened amid refinery outages following Ukrainian drone attacks, high seasonal demand, and transport problems. Moscow tightened restrictions on fuel exports and turned to imports to support domestic supplies. For Kyrgyzstan, the decline in Russian supplies quickly became a problem. According to the National Statistical Committee of the Kyrgyz Republic, the average price of AI-92 gasoline reached 88.24 soms per liter by August 12, around 6% above the July average. AI-95 rose by 12% to 109.24 soms, while diesel increased by 5% to 102.08 soms. The government has already raised its year-end inflation forecast to 14–15% from an earlier projection of 9%, citing rising fuel costs as one reason. The National Bank of the Kyrgyz Republic kept its policy rate at 12% on July 27. Among the external inflation risks, the central bank cited volatile global food prices and possible disruptions to petroleum-product supplies through the Strait of Hormuz. Its medium-term inflation target is 5–7%. Kyrgyzstan cannot quickly replace Russian fuel, but importers have begun seeking supplies farther afield. Kanatbek Eshatov, president of the Association of Oil Traders of Kyrgyzstan, said on August 12 that reduced supplies from Russian refineries had prompted deliveries from...

Hydrometeorology

Kazakhstan Launches High-Resolution Weather Forecast Powered by Supercomputer

Kazakhstan has introduced a new high-resolution digital weather forecasting system powered by the country’s most powerful supercomputer, marking a significant step toward strengthening national hydrometeorological security. The National Hydrometeorological Service, Kazhydromet, has deployed the Weather Research and Forecasting (WRF) model across the entire territory of the country. The system provides forecasts with a spatial resolution of 2 kilometers, significantly enhancing the accuracy and detail of weather predictions. All computations are carried out on Central Asia’s most powerful supercomputer at the Farabi Supercomputer Center, located at Al-Farabi Kazakh National University in Almaty. According to Amirkhan Temirbayev, Director of the Farabi Supercomputer Center, the new model strengthens Kazakhstan’s ability to anticipate hazardous natural phenomena and respond more effectively to climate-related risks. “The new system improves early warnings of dangerous weather events, particularly in the mountainous regions of Almaty and southeastern Kazakhstan and enhances the country’s hydrometeorological security. Accurately modeling atmospheric processes requires millions of calculations that conventional servers cannot handle. A supercomputer is no longer just a scientific instrument, it is infrastructure of national importance,” Temirbayev said. He added that the initiative demonstrates how university-based high-performance computing resources are increasingly being used to address applied government needs. While the supercomputer is currently dedicated to weather forecasting, potential future applications include flood and mudflow modeling, climate analysis, air quality monitoring, and digital urban simulations. Kazhydromet plans to publish outputs from the new WRF model on its official website, where users will have access to interactive weather maps and detailed forecasts for all regions of Kazakhstan.

Ecology

Kazakhstan Warns of Potential Drought Impact on Western and Southern Harvests

Southern and western regions of Kazakhstan are expected to face a shortage of rainfall this summer during the critical ripening period for vegetables and fruits. Minister of Water Resources and Irrigation, Nurzhan Nurzhigitov, has urged local authorities and the Ministry of Agriculture to prepare measures for irrigating croplands. Speaking at a government meeting, Nurzhigitov cited forecasts from Kazhydromet, Kazakhstan’s national meteorological service, supported by data from the World Meteorological Organization and the North Eurasian Climate Center. According to the forecasts, a short-term drought is expected in May in the southern part of the Kostanay region, a major grain-producing area in northern Kazakhstan. However, this will likely be alleviated by subsequent summer rains. In contrast, the May drought in other regions is expected to persist. Areas likely to be affected include the southwestern half of West Kazakhstan and Mangistau regions, the northwestern Kyzylorda region, northern parts of the Almaty and Zhambyl regions, southern Karaganda, and various parts of the Aktobe, Atyrau, Abai, and Turkestan regions. Nurzhigitov emphasized that the western and southern regions, located in the Zhayik and Syr Darya river basins, are particularly at risk. He warned that prolonged dry conditions could significantly disrupt the agricultural sector. “It is necessary to develop a set of operational measures aimed at minimizing the consequences of a possible moisture deficit,” he said, highlighting especially severe concerns about water shortages in the Turkestan and Kyzylorda regions. According to Nurzhigitov, water reservoirs in the affected basin are currently at only 75% of average capacity. As previously reported by The Times of Central Asia, Kazakhstan aims to boost its grain exports this year, with an eye on expanding deliveries to Africa.

Electricity

Kazakhstan Faces Record Power Deficit as Electricity Shortfall Hits 2.4 Billion kWh

Kazakhstan has experienced its most significant electricity imbalance in recent years. According to data from Energyprom.kz, the gap between electricity production and consumption reached 2.4 billion kilowatt-hours (kWh) in 2024, an increase of 200 million kWh from 2023, when the shortfall stood at 2.2 billion kWh. While the country’s total generation amounted to 117.9 billion kWh, domestic consumption exceeded 120.4 billion kWh. Imports Offset Domestic Shortfalls To address this growing energy deficit, Kazakhstan primarily imports electricity from Russia. Smaller volumes are supplied by Kyrgyzstan, although these are typically part of Russian transit deliveries to Kyrgyz consumers. Despite these imports, domestic electricity generation continues to grow at a modest pace. In 2024, total generation rose by 4.2%, with a 3% year-on-year increase recorded in the first two months of 2025. Nevertheless, the production boost has not been sufficient to meet demand, necessitating continued reliance on external suppliers. Decline in Coal Dependence One notable trend is the gradual reduction in Kazakhstan’s dependence on coal-fired thermal power plants (TPPs), traditionally among the most polluting energy sources. In 2024, the share of coal-fired generation declined from 77.4% to 74.9%, equivalent to approximately 88.4 billion kWh of total output. In contrast, the share of alternative power sources increased. Hydroelectric power plants (HPPs) contributed 9.5% of total generation, up 1.8 percentage points year-on-year, while gas turbine power plants (GTPPs) accounted for 10.1%, a 0.3-point increase. Renewable energy sources, including wind, solar, and biogas, produced 6.4 billion kWh, representing 5.4% of total electricity output. Revised Forecasts and Growing Challenges The Ministry of Energy of the Republic of Kazakhstan has updated its projections to reflect the sector’s challenges. As of early 2025, officials estimate the country’s electricity deficit could grow to 5.7 billion kWh by year-end. This revision stems from downgraded forecasts for generation volumes, which are now projected at 117.1 billion kWh, down from an earlier estimate of 121.8 billion kWh. Expectations for the commissioning of new generation capacity have also been lowered, further exacerbating the shortfall. Nonetheless, government planners remain cautiously optimistic. If several large-scale energy projects move forward on schedule, the deficit could shrink to 2.6 billion kWh by the end of 2026. A full build-out of planned capacity could even lead to a surplus. New Capacity and Long-Term Plans The government has outlined plans to construct 59 new energy facilities with a combined capacity of 26.4 gigawatts (GW). These include both new builds and upgrades to existing plants. Major initiatives involve constructing a nuclear power plant (2.4 GW) and a third state district power station (GRES-3) with 2.6 GW of capacity. Additionally, 11 regional centers are set to receive combined-cycle gas turbines with a total capacity of 4.5 GW. Renewable energy is also a key focus. By 2029, Kazakhstan aims to commission four large wind power plants equipped with energy storage systems, totaling 3.8 GW in capacity. These projects are being developed through intergovernmental agreements with investors from the United Arab Emirates, France, and China.

Economic Growth

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.

Forecast

Opinion – Storm Clouds Over Kazakhstan: Oil Slump and Global Risks Threaten Economic Stability

The persistent decline in Brent crude prices is the latest sign of a looming 'perfect storm' for Kazakhstan’s economy, the largest in Central Asia. With the mining sector comprising nearly half of its GDP and oil as a cornerstone resource, the nation’s economic stability is facing a cascade of potential shocks. Oil Prices and Budget Vulnerability Kazakhstan is grappling with significant economic headwinds amid forecasts of a global recession and declining energy prices. In April 2025, OPEC+, including Kazakhstan, unexpectedly agreed to raise oil production by 411,000 barrels per day, pushing prices below $65 per barrel. Given the country's reliance on hydrocarbon exports, such price drops jeopardize state revenues. Analysts say Kazakhstan needs oil prices to remain above $42.30 per barrel in 2025 to maintain fiscal stability. However, the threat extends beyond oil. As energy journalist Oleg Chervinsky noted on his Telegram channel, global commodity prices across the board are falling, a signal that recession is imminent. “The bad news for Kazakhstan is that prices are dropping not only for oil but for all raw materials,” Chervinsky wrote. “JP Morgan estimates the global recession probability at 60%. Even though oil and gas are exempt from Donald Trump’s new tariffs, the broader protectionist policies could fuel inflation, curb growth, and escalate trade tensions”. Trump's Trade War and Kazakhstan President Donald Trump’s sweeping tariffs are designed to limit low-cost imports and incentivize domestic production. Kazakhstan has been hit with a 27% tariff, the highest among the Central Asian nations. Its strategic location within China’s Belt and Road Initiative positions it as a potential re-export hub, prompting higher trade scrutiny. Kazakhstan’s Ministry of Trade and Integration has downplayed the immediate economic impact, noting that U.S.-bound exports account for less than 5% of total trade, and the country still holds a $1 billion trade surplus with the U.S. While the direct fallout may be limited, the broader implications of a global trade war could severely strain Kazakhstan’s economy. If a global recession takes hold, demand for Kazakhstan’s key exports, oil, uranium, and metals, will drop, dragging prices down further. Currency Pressures and Investor Retreat With shrinking export revenues, the tenge faces devaluation, leading to inflation, rising import costs, and weakened consumer purchasing power. In addition, recessions typically dampen foreign direct investment, especially in emerging markets like Kazakhstan, where perceived risk grows amid uncertainty. The China Factor The U.S.-China trade conflict is another critical variable. Trump’s strategy aims to undercut Beijing’s economic strength, but for Kazakhstan, China is its largest trading partner, representing over 15% of foreign trade. A slowdown in China would reduce demand for Kazakhstani raw materials and transit services. Such a downturn could also jeopardize President Kassym-Jomart Tokayev’s ambition to establish Kazakhstan as a vital trade corridor between China and Europe. While the Belt and Road Initiative is unlikely to collapse, reduced cargo flows would strain state revenues. China is also the primary buyer of Kazakhstan’s copper, aluminum, and ferroalloys. Any industrial slowdown there immediately impacts Kazakhstan's export volumes. Converging Risks Taken...