GDP Forecast - The Times Of Central Asia

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Economic Growth

Uzbekistan Raises 2026 Growth Forecast to 8.1%

Uzbekistan has raised its 2026 economic growth forecast from 6.6% to 8.1%, after stronger-than-expected performance last year and in the first quarter of 2026. The Ministry of Economy and Finance’s updated Fiscal Strategy for 2027-2029 projects nominal GDP of 2.183 quadrillion soums this year (about $180 billion). The revision follows growth of 7.7% in 2025, above the original 6.6% forecast, and an 8.7% expansion in the first quarter of 2026. The ministry expects market services to grow by 16.6% in 2026, industrial production by 8%, construction by 12.4%, and agriculture by 5%. Inflation is forecast to slow to 6.5%, while unemployment falls from 4.8% in 2025 to 4.5%. The stronger projection rests partly on domestic demand. The strategy expects non-gold exports to rise by 20%, capital investment by 12.9%, and remittance growth to remain around 10%. Separate Central Bank figures show that remittances rose 13% to $3.8 billion in the first quarter, helping to support household spending even as Russia’s share of transfers declined. Growth is forecast to slow to 6.9% in 2027, before rising to 7.1% in 2028 and 7.4% in 2029. Inflation is projected at 5-6% in 2027 and 5% in 2028 and 2029. The government also intends to keep the fiscal deficit within its rules and public debt below 40% of GDP. The Ministry of Economy and Finance says meeting these targets will require stronger tax administration, fewer ineffective exemptions, tighter oversight of public-private partnerships, and further action against the shadow economy. It also plans more transparent medium-term budgeting and closer scrutiny of fiscal risks. The success of those reforms will determine whether rapid growth can be sustained without weakening public finances. The fiscal strategy uses the IMF’s April global outlook as part of its external assumptions. The government’s estimate is considerably more optimistic than the IMF’s 6.8% forecast. In its June assessment, the Fund said Uzbekistan’s outlook remained favorable but warned that the economy could be running above its potential. It identified weaker global conditions and domestic overheating as the principal risks. The revised figures also strengthen the government’s claim that the Uzbekistan-2030 Strategy target of an economy worth more than $240 billion remains achievable. The plan relies on private investment, export growth, higher productivity, and continued macroeconomic reforms. Economist Otabek Bakirov said the 8.1% projection would mark the strongest growth in Uzbekistan’s recent history. “According to the Fiscal Strategy forecasts, economic growth will accelerate to 8.1% in 2026. If this happens, it will become a new record for the country’s recent history,” he wrote in an analysis of the forecast. In a separate calculation, Bakirov put nominal GDP above $205 billion in 2027, $228 billion in 2028, and $257 billion in 2029. On that path, the $240 billion target would be surpassed a year early. However, he cautioned that the scenario depends on maintaining strong growth, low inflation, and exchange-rate stability, without a major domestic or external crisis. A weaker soum would reduce the dollar value of GDP even if output continued to rise quickly...

Economic Growth

Kazakhstan’s GDP Growth Tops 4% in First Half of 2026 Despite Lower Oil Output

Kazakhstan’s economy expanded by 4.1% in the first half of 2026, driven primarily by strong growth in non-oil sectors despite a decline in crude oil production, according to the Ministry of National Economy, citing data from the Bureau of National Statistics. Economic growth accelerated from 3.7% recorded during the first five months of the year, while manufacturing continued to outperform the broader economy. According to the ministry, real GDP growth reached 4.1% in January-June, even as oil production fell 8.4% compared with the same period last year. “The non-oil sector remains the main driver of growth, expanding by more than 5% during the first half of the year,” the ministry said. “More than 80% of GDP growth came from manufacturing, construction, trade, and transport.” Construction remained the fastest-growing sector, with output increasing 15.2% year on year. Kazakhstan commissioned 8.5 million square meters of housing during the first six months of the year, 6.7% more than during the same period in 2025. Manufacturing output expanded 9.8% during the first half of the year. Total manufacturing production reached $34.1 billion, surpassing mining output of approximately $33.6 billion. Although growth slowed in metallurgy, which accounts for more than 40% of Kazakhstan’s manufacturing sector, other industries posted strong gains. Production of fabricated metal products increased 39.9%, automobile manufacturing rose 31.6%, pharmaceutical output grew 43.6%, chemicals expanded 20.7%, rubber and plastic products increased 21.8%, construction materials rose 14.1%, and food production climbed 14.7%. Other sectors also maintained positive momentum. Trade expanded 5.7%, agriculture grew 4.4%, telecommunications services increased 4.3%, and transport and logistics services rose 7.1%. Growth in transport was supported by a 14% increase in auxiliary transport services, while rail freight volumes rose 4.9% and road freight transportation increased 11.4%. Investment activity also remained robust. Investment in fixed capital increased 9.6% compared with the first half of 2025. The strongest gains were recorded in information and communications, where investment more than doubled, electricity supply at 61.4%, manufacturing at 33.3%, agriculture at 24.6%, and transport at 11.6%. “The dynamic development of non-resource sectors and strong investment activity continue to provide a solid foundation for Kazakhstan’s economic growth,” the ministry said. As previously reported by The Times of Central Asia, Kazakhstan’s GDP could reach $320 billion by the end of 2026, up from $306 billion a year earlier. S&P Global Ratings projects GDP growth of 4.1% in 2026, down from 6.5% in 2025. Kazakhstan’s National Development Plan through 2029 sets a GDP growth target of 6.2% for 2026.

GDP

Why Kazakhstan Is Moving Ahead in GDP Per Capita

The International Monetary Fund has projected Kazakhstan to reach roughly $23,170 in nominal GDP per capita by 2031. On the same current-dollar measure, it is projected to pass China around 2026 and Russia by 2031. The comparison is a milestone, but it requires perspective. It is neither a purchasing-power verdict nor a comprehensive measure of household welfare. It nevertheless marks Kazakhstan’s entry into a higher income band. The question is how a state that began independence amid post-Soviet economic disruption reached this stage. How Kazakhstan Reached This Point Kazakhstan’s present position rests on a three-decade progression of state capacity, resource development, and institutional learning. When the Soviet Union collapsed, the country did not inherit a working growth model. It inherited broken production chains, institutional rupture, and inflation. It therefore faced the task of building a market economy out of an administrative-command system. In current U.S. dollars, GDP per capita stood near $1,400 in 1991, and exceeded $14,000 by 2024; in constant-dollar terms, the gain was smaller but still substantial. Hydrocarbons supplied the base, but political institutions and leadership acumen determined how much of that base could survive volatility. The path since 1991 has not been smooth. The 1990s brought collapse and stabilization. The 2000s brought hydrocarbon acceleration, foreign direct investment, and a rise in nominal GDP per capita climbing from a little more than $1,000 in 2000 to more than $8,000 in 2008. The global financial crisis interrupted the rise without destroying the model. The early 2010s brought recovery. The 2014–2016 oil-price and exchange-rate shock then tested the foundations already built, as the current-dollar figure fell sharply while real output per person proved more stable. COVID imposed another interruption. The post-2020 rebound belongs to that sequence. The Tokayev agenda belongs to this third stage of institutional learning. It did not create the GDP per capita trajectory over three decades, but today the issue has shifted from accumulation to stewardship. The inherited growth model had to be made more competitive, more rules-based, more socially visible, and more sustainable. Since 2022, the government has treated de-monopolization, asset recovery, social investment, and private-sector development as connected elements of the same governing effort. The IMF’s latest assessment shows the pressure inside that effort: growth remains strong, supported by oil output and non-oil activity, while fiscal, inflationary, and quasi-state-sector pressures still require correction. The Reform Program and Its Results Decree No. 542, signed in May 2024, set out measures to liberalize the economy, limit expansion of the quasi-state sector, revise privatization criteria, strengthen competition, and improve conditions for entrepreneurship. Its operative terms are competition, privatization, reduced state participation, and lower business costs. The decree temporarily halts the creation of new quasi-state entities and provides for an audit of state and quasi-state assets, partly to identify candidates for privatization. It also incorporates reforms affecting procurement and business regulation. The decree seeks to bend Kazakhstan’s accumulated macroeconomic trajectory toward commercial governance. The challenge is not to remove state capacity but to prevent it from crowding out private...

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.

Climate Change

Central Asia’s Climate Risks Could Cost Up to 130% of GDP by 2080

By 2080, climate change is expected to have a profound impact on the economies of Central Asian countries, with potential losses ranging from 20% to 130% of GDP. The most severe effects are projected for mountainous nations. These estimates were presented at a CAREC technology forum by Iskandar Abdullaev, a senior research fellow at the International Water Management Institute in Uzbekistan. According to Abdullaev, climate change is no longer solely an environmental issue but an increasingly significant economic factor. Key risks include droughts and water scarcity, floods, heatwaves, and glacier melt. The projected economic impact varies across the region. Tajikistan could face losses of between 80% and 130% of GDP, Kyrgyzstan 70% to 120%, Kazakhstan 40% to 80%, Uzbekistan 30% to 45%, and Turkmenistan 20% to 60%. Abdullaev emphasized that mountainous countries – Tajikistan and Kyrgyzstan – are particularly vulnerable, as climate change directly affects water resources. Glacier melt reduces river flows, creating challenges for both energy production and water supply. Droughts and extreme heat are already placing pressure on agriculture, with declining crop yields and reduced pasture productivity. Without adaptation measures, the region’s long-term sustainability could be at risk. Experts stress that mitigation and adaptation efforts are essential to reduce these risks. These include modernizing irrigation systems, adopting climate-resilient agricultural technologies, and expanding renewable energy capacity. This is not the only warning. According to the World Bank, natural disasters are already causing significant economic damage in Central Asia. Losses from extreme events, including floods and earthquakes, can reach up to 6% of GDP, with earthquakes alone accounting for up to $2 billion in damages. At the same time, countries in the region face substantial financing gaps following major disasters. In Tajikistan, this gap could reach up to $1.5 billion. Experts warn that climate change is likely to intensify these risks, further increasing the economic burden on the region.

GDP Forecast

S&P Global Ratings Expects Kazakhstan’s GDP Growth to Slow in 2026

The international rating agency S&P Global Ratings has affirmed Kazakhstan’s long-term sovereign credit rating at BBB- and its short-term rating at A-3, while maintaining a positive outlook on the long-term rating. At the same time, S&P analysts expect economic growth to decelerate in 2026 and warn of persistently high inflation. According to commentary on S&P’s projections by analysts at the Halyk Finance research center, Kazakhstan’s GDP growth is forecast to slow to 4.1% in 2026. The projected slowdown is attributed to a 4% decline in oil production, weaker fiscal stimulus, and reduced consumer activity amid higher taxes and tighter credit conditions. In the medium term, for 2028-2029, S&P expects GDP growth to remain at around 4% or slightly higher. However, risks persist, particularly those related to geopolitical tensions and the continued sensitivity of Kazakhstan’s budget revenues and exports to fluctuations in global oil prices. For comparison, Kazakhstan’s GDP grew by 6.5% in 2025. In 2026, the government expects growth of 6.2%, a notably more optimistic projection than S&P’s estimate. Other international institutions have offered varying forecasts. The European Bank for Reconstruction and Development (EBRD) recently upgraded its 2026 GDP growth forecast for Kazakhstan to 4.7%, up from 4.5%. In contrast, the International Monetary Fund (IMF) in January lowered its 2026 growth forecast by 0.4 percentage points to 4.4%. Returning to S&P’s projections, the agency expects inflation to reach 11% by the end of 2026 and forecasts an exchange rate of 540 tenge per $1. Halyk Finance analysts stated that they broadly agree with S&P’s GDP and inflation forecasts. However, they consider the risks of further weakening of the national currency to be greater than the agency anticipates. According to their estimates, the exchange rate in 2026 could depreciate to 580-590 tenge per $1. S&P also expects the Kazakh government to continue fiscal consolidation in the medium term by expanding the tax base and tightening control over public spending, while preserving substantial liquid reserves. Over the next three years, the government does not plan to withdraw additional funds from the National Fund through targeted transfers or bond placements. The guaranteed annual transfer from the National Fund is set at $5.5 billion, half the $11.1 billion withdrawn in 2025. “We share S&P Global Ratings’ positive assessment, provided that the government strictly adheres to its fiscal consolidation commitments and reduces transfers from the National Fund,” Halyk Finance concluded. The Times of Central Asia previously reported that the IMF believes Kazakhstan’s current GDP growth rate exceeds the country’s long-term economic potential, thereby increasing inflationary pressures and signaling potential overheating of the economy.