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Economic Growth

Tajikistan Reports Strong 8.4% Economic Growth in 2025

Tajikistan’s economy grew by 8.4% in 2025, according to official data released by the country’s statistical authorities, marking one of the strongest growth rates in Central Asia last year. President Emomali Rahmon announced the figure during a year-end address to parliament, saying gross domestic product reached approximately 173 billion somoni, or about $18.8 billion. Official data shows growth was driven primarily by industry, construction, agriculture, and services. The Statistical Agency under the President of Tajikistan reported that industrial production increased by more than 20% year-on-year, supported by mining, metallurgy, cement production, and food processing. Construction activity also expanded, reflecting continued state investment in roads, housing, and energy infrastructure. Authorities highlighted ongoing work on the Rogun hydropower project as a central pillar of economic policy. The dam is expected to secure the domestic electricity supply and boost exports once fully operational, particularly to neighboring markets. Remittances remained a key contributor to economic growth in 2025. Transfers from Tajik migrant workers, most of whom are employed in Russia, rose during the year, supporting household consumption and helping offset external economic pressures. According to the World Bank, remittances have accounted for a very large share of Tajikistan’s GDP, with personal remittances near 48% of GDP in recent years, leaving the economy highly exposed to labor market conditions abroad. Foreign trade turnover also increased. Exports of electricity, metals, and agricultural products rose, while imports of machinery, fuel, and construction materials expanded alongside investment activity. Regional media reported that China, Russia, and neighboring Central Asian states remained Tajikistan’s main trading partners in 2025. Despite the strong headline growth, international financial institutions have continued to flag structural weaknesses. The International Monetary Fund has warned that sustaining high growth will require reforms to improve governance, strengthen the banking sector, and expand the role of the private sector in the economy. Analysts also note that rapid growth partly reflects a low statistical base and heavy reliance on state-led investment. Job creation in higher-value sectors remains limited, contributing to continued labor migration and leaving the economy vulnerable to external shocks. The government has set similarly ambitious targets for 2026, with officials emphasizing industrialization, infrastructure development, and energy exports. Whether Tajikistan can maintain its pace of growth while addressing long-standing structural constraints will remain a key test for the country’s economic trajectory in the coming years.

Economy

Kazakhstan’s Economy Grew by 6.5% in 2025

Kazakhstan’s economy expanded by 6.5% year-on-year in January-December 2025, according to preliminary data from the National Statistics Bureau. The Ministry of National Economy reported that the key drivers of GDP growth were industry, transport, construction, and trade. At year-end, the industrial production index stood at 7.4%, with the manufacturing sector showing steady growth of 6.4%. Positive dynamics in industry were attributed to an 8.1% increase in food production, a 5.9% rise in oil refining, 9.8% growth in the chemical industry, a 1.2% uptick in metallurgy, and a 12.9% increase in machine building . The transport and warehousing sector recorded a substantial 20.4% growth in 2025, driven by increased freight transport by road and rail, alongside growth in passenger transport across various regions. The volume of ancillary transport services also expanded, including freight forwarding, air traffic control, airport and warehouse operations, and grain and refrigerated cargo storage. Construction surged by 15.9%, linked to the implementation of major infrastructure and social development projects, including the building of schools, medical facilities, and transport and engineering infrastructure. In the same period, 20.1 million square meters of housing were commissioned, a 5.1% increase from 2024. Trade posted an 8.9% increase by the end of the year, led by wholesale trade, which comprised more than two-thirds of the sector’s volume. Notably, wholesale trade in grain, seeds, and animal feed rose by 160%, trade in equipment nearly doubled, and pharmaceutical sales increased by 44.1%. Sales of automobiles grew by 33%, while dairy products, eggs, edible oils, and fats rose by 25.8%, and sugar, chocolate, and confectionery products by 21.2%. Agriculture, forestry, and fisheries grew by 5.9%, supported by a 7.8% increase in crop production and 3.3% in livestock production. The information and communications sector posted 3.6% growth. “Overall, the pace of economic development reflects the steady growth of key industries,” the Ministry of National Economy stated. For comparison, GDP growth in 2024 stood at 5%, with the largest contributions from construction (15.3%), agriculture, forestry, and fisheries (13.7%), transportation and warehousing (9.4%), wholesale and retail trade (8.9%), and manufacturing (6.8%). As previously reported by The Times of Central Asia, President Kassym-Jomart Tokayev forecast in early December 2025 that GDP would exceed 6% growth by year-end.

Economic Growth

Development Spending in Kyrgyzstan Surpasses Social Spending for the First Time

The Kyrgyz government has reported strong economic performance in 2025, highlighting robust GDP growth and strengthened public finances. At a year-end meeting, Chairman of the Cabinet of Ministers Adylbek Kasymaliev announced that all state objectives had been met despite challenging conditions. According to Kasymaliev, gross domestic product is expected to grow by more than 10% by year’s end, positioning Kyrgyzstan among the global leaders in economic growth. The country’s GDP reached $20.5 billion, and for the first time in its history, the consolidated budget surpassed $11.5 billion. A budget surplus of $392 million was recorded, which Kasymaliev described as a sign of growing financial stability. He emphasized the country’s accelerated infrastructure development, with 341 new facilities commissioned in 2025. Projects include roads, parks, cultural and sports centers, and residential buildings, many implemented under State Mortgage Company initiatives. Notably, for the first time, development expenditures outpaced social expenditures, a shift aligned with the recommendations of international financial institutions. Macroeconomic improvements were also supported by data from the National Bank of Kyrgyzstan. As of the third quarter of 2025, the banking sector showed strong lending growth: the overall loan portfolio rose by 10.5% over the quarter and approximately 33% year-on-year. Consumer loans made up the largest share at 16.6%, followed by mortgages at 10.5% and agricultural loans at 3.1%. Expansion in the construction sector has been driven by both state spending and foreign investment. Meanwhile, the dollarization of the loan portfolio continued to decline, falling to 17.8% from over 20% at the start of the year. “High activity among the population and businesses has contributed to an increase in lending in the national currency over the nine months of 2025,” the National Bank stated.

EAEU

From GDP to AI: EAEU Leaders Review Integration Milestones in St. Petersburg

The leaders of the Eurasian Economic Union (EAEU) gathered on December 21 at the Yeltsin Presidential Library in St. Petersburg, Russia, to assess the bloc’s progress and outline future integration priorities. The summit was attended by the leaders of EAEU member states, President of Russia, Vladimir Putin, President of Belarus, Aleksandr Lukashenko, Prime Minister of Armenia, Nikol Pashinyan, President of Kazakhstan, Kassym-Jomart Tokayev, President of Kyrgyzstan, Sadyr Zhaparov, and Chairman of the Board of the Eurasian Economic Commission, Bakytzhan Sagintayev. In an expanded format, representatives of Uzbekistan, Indonesia, Iran, and Cuba also participated. The meeting took place against the backdrop of continued global economic fragmentation, as the EAEU looks to position itself as a stable integration platform within an increasingly multipolar economic order. [caption id="attachment_41254" align="aligncenter" width="2560"] Image: Akorda[/caption] Opening the meeting, Vladimir Putin proposed a year-end review and highlighted key decisions aimed at deepening cooperation. He stated that the EAEU has solidified its position as an independent and self-sufficient center within the evolving multipolar world. Putin pointed to rising combined GDP figures and noted that EAEU membership has contributed to economic stability and improved living standards across member states. These assessments framed the EAEU not only as a regional trade bloc but as a long-term economic center adapting to shifting global alignments. [caption id="attachment_41258" align="aligncenter" width="2560"] Image: Akorda[/caption] Putin also cited progress in building the union’s payment infrastructure, removing trade barriers, and enhancing transport connectivity. Among individual economies, Kyrgyzstan stood out with a GDP growth rate of around 10%. Much of the focus, however, remained on translating macroeconomic gains into deeper market integration across energy, finance, and logistics. Belarusian President Alexander Lukashenko, addressing the summit as chair of the EAEU, called for renewed approaches to economic engagement with third countries over the next five years. He endorsed deeper ties with what he termed the “global majority,” while acknowledging existing challenges, such as delays in establishing unified energy markets and hesitancy among member states to form a common financial market. Nonetheless, he described the Union State of Russia and Belarus as the “locomotive of integration” in the post-Soviet region. The discussion highlighted a recurring tension for the bloc: expanding external partnerships while still completing core internal market harmonization. [caption id="attachment_41259" align="aligncenter" width="2560"] Image: Akorda[/caption] Kazakh President Kassym-Jomart Tokayev emphasized the EAEU's milestone year as it entered its second decade. He projected a 2% increase in the union’s combined GDP in 2025 and noted that intra-union direct investment had surpassed $20 billion. Kazakhstan alone saw a nearly sevenfold increase in EAEU-related investment from $600 million in 2015 to $4 billion in 2024. [caption id="attachment_41260" align="aligncenter" width="2560"] Image: Akorda[/caption] Tokayev also proposed the systematic integration of artificial intelligence technologies into EAEU operations, from trade forecasting to customs duties assessment. He highlighted the union’s potential as a global transport and logistics hub and advocated for the swift implementation of the Caspian Sea shipping agreement. Uzbek President Shavkat Mirziyoyev noted that Uzbekistan’s trade with EAEU countries had nearly doubled to $20 billion over its...

Investments

Average Annual Investment in Kyrgyzstan Grows by 140%

Average annual investment in Kyrgyzstan has increased by 140% in recent years, Prime Minister Adylbek Kasymaliyev announced at an investment forum held in Bishkek. The event brought together representatives from various sectors of the Kyrgyz economy, including construction, tourism, the agro-industrial complex, the jewelry industry, and associations of suppliers and distributors. Heads of development funds offering preferential financing to domestic businesses also participated. Kasymaliyev acknowledged that the state's previous involvement in attracting investment to the private sector had been fragmented. However, this is changing under Kyrgyzstan’s new investment strategy, a comprehensive, state-level framework designed to draw both domestic and foreign capital. As a result of recent reforms, the prime minister stated that Kyrgyzstan’s gross domestic product has nearly tripled over the past five years. GDP growth for the first 11 months of 2025 stood at 10.2%. "We expect promising initiatives from you. Only through joint efforts can we lay a solid foundation for a dynamic and competitive economy," Kasymaliyev said, addressing the business community. He also emphasized the importance of continuous dialogue between government agencies and the private sector to maintain a stable investment flow. “For any state, investment is the main source of economic growth, stability, and development. In the current environment, time is the investor's main asset, and the country's internal stability is the key to the success of both state and business,” he said. Kasymaliyev identified several priority sectors for attracting investment, including hydropower, logistics, agriculture, mining, IT, the halal industry, tourism, and pharmaceuticals. Rustam Baltabaev, Executive Director of the Association for the Development of the Agro-Industrial Complex, told The Times of Central Asia that while relevant legislation is necessary, it alone is not sufficient to foster a favorable investment climate. The decisive factor, he argued, is sustained, constructive dialogue between the government and the business sector. “The investment climate is defined not by declarations, but by the practical conditions under which businesses operate,” Baltabaev said. “It includes the speed and cost of launching a project, the time required to obtain permits, predictable regulations, protection of property rights, infrastructure, access to financing, human capital, and fair competition. Business associations play a key role by channeling investor concerns into actionable regulatory solutions.” Participants at the forum noted that entrepreneurs have previously criticized the government for inadequate support. However, many expressed cautious optimism that new approaches and improved cooperation between the public and private sectors could signal a shift. Both government officials and business leaders agreed that mutual respect and policy consistency are critical to attracting new foreign investors to Kyrgyzstan.

Foreign debt

Opinion: Is Uzbekistan Importing a Future Crisis?

Once hidden from the view of international investors, Uzbekistan is rapidly rewriting its economic narrative. Over the past eight years, the nation attracted over $113 billion in foreign investment, drawing financial firms and mutual funds eager to seize the momentum of Tashkent’s trade liberalization and its ambition to double GDP by 2030. And rightly so; 40% of the country’s population, which is the largest in Central Asia, is under the age of 25, while its gold production is within the top ten globally. Uzbekistan is in its breakout moment. With Uzbek bonds receiving a further upgrade to a BB rating from both Fitch and S&P Global, comparisons to Vietnam or Indonesia no longer seem aspirational. However, the question remains: Is Uzbekistan ready to set foot on the financial global stage, and, more importantly, is it structurally equipped to stay there? Amidst its sweeping economic transformation, IMF officials have warned the administration to remain vigilant against economic shocks beyond its control: volatile commodity prices, contractions in foreign investor liquidity, and consequently, tighter external financing. These warnings are not theoretical. They come from decades of IMF experience with financial crises in other emerging markets, such as the Latin American debt crises in the 1980s, the “Tequila Crisis” in 1994, and the “Asian Flu” in 1997. In those historic cases, newly liberalized economies suffered not because they lacked growth, but because they lacked a defense against the liquidity cycle. The economic reality is that global capital flows are often driven by decisions made in New York or London, not Tashkent. This economic phenomenon is often explained by the “liquidity model,” which argues that changes in exogenous liquidity conditions - driven by the economic situation of investor countries - shape capital flows into emerging markets. Thus, without sufficient financial market depth, emerging capital markets cannot absorb external shocks. And when global liquidity tightens, these flows can abruptly reverse, resulting in prolonged economic instability and loss of monetary sovereignty. The sequence unfolds as follows: capital inflows surge and balance-sheet vulnerabilities quietly build up; then an external shock - such as a monetary tightening in the creditor economy - causes inflows to slow; the local currency depreciates; and a feedback spiral of declining confidence and weakening balance sheets pushes the economy into crisis. Currency loses trust, struggles to recover, and money flees. Some initial signs of this pattern can be observed in Uzbekistan’s current boom. The economy is increasingly reliant on foreign borrowing: external debt as a share of GDP rose from 24.7% in 2017 to 61.4% in 2024, reaching $78.5 billion by June 2025. According to CEIC benchmarks, this level is already comparable to Poland’s 51.8% and Malaysia’s 69.9%, and now exceeds Kazakhstan’s 59.2%, reflecting growing dependence on financing from the World Bank, Eurobond investors, and major East Asian institutions. High debt levels alone do not necessarily imply instability. They can reflect efforts to accelerate domestic development. The real source of fragility in past crises was not the volume of debt but its denomination. When...