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Inflation

Experts Say Kazakhstan Must Boost Manufacturing to Tame Inflation

Inflation is steadily eroding incomes in Kazakhstan, depleting savings and undermining government efforts in the social sector. The Times of Central Asia previously noted that surging economic growth could be a contributing factor to Kazakhstan’s inflation problem. But despite rising prices, the government has no plans to apply the brakes. On the contrary, officials point to promising GDP growth driven by sectors beyond oil. Meanwhile, independent experts argue that only large-scale industrial development can provide a lasting solution to inflation. Persistent Price Pressures Inflation continues to outpace official projections. In August, annual inflation hit 12.2%, and by the end of 2025 it is expected to reach 14%, well above the National Bank of Kazakhstan’s target range of 5-6%. Economists say the country’s dependence on imports is a key driver. Kazakhstan imports large volumes of food, fuel, medicine, equipment, and consumer goods. Wage and pension increases are failing to keep pace with the surge in prices. President Kassym-Jomart Tokayev has acknowledged that high inflation poses a serious challenge, warning it is “eating away at economic growth and household incomes.” Government efforts to stabilize prices have yet to show meaningful results. On September 23, Minister of Trade and Integration Arman Shakkaliev announced that Kazakhstan will gradually phase out price controls on socially significant food products (SZPT) in favor of targeted digital support for consumers. The SZPT list currently includes 19 essential items. At the same time, Prime Minister Olzhas Bektenov instructed agencies to crack down on unjustified price hikes for basic goods, ordering strict enforcement of available price control tools. Growth at a Cost Inflation, according to Deputy Prime Minister and Minister of National Economy Serik Zhumangarin, is being fueled by economic expansion. He warned that efforts to restrain inflation could hinder growth. “Since 2023, GDP has grown by 5%, and in 2024 we grew without the contribution of oil. This year is a turning point. From 2026, oil will no longer influence GDP growth,” Zhumangarin said. Although Kazakhstan’s economy has long relied on oil revenues, the minister believes this trend is now shifting. “Economic growth is always accompanied by high inflation,” he said. “More than $12 billion in investments have already been attracted, and the target for the year is $24 billion. The government will soon announce a new strategy for economic growth. We must follow the path of Asian countries but with modern technologies.” Call for Industrialization Independent analysts argue that real progress against inflation requires mass domestic production across a wide range of goods. Political analyst Gaziz Abishev stressed the urgency of moving beyond megaprojects toward practical, infrastructure-linked industry. “Kazakhstan needs real production, not fairy-tale megaprojects. Industry tied to infrastructure, logistics, human resources, and markets solves many issues,” he wrote. “It creates well-paid jobs, stimulates small and medium-sized businesses, reduces reliance on imports, supports the tenge, and addresses budget deficits.” Abishev also called for openness to foreign industrial investment, regardless of origin. His comments appear to push back against public concerns over the influence of Russia, China, and Western...

Economy

Kazakhstan Tops Central Asia for GDP per Capita, Surpassing Russia and China

Kazakhstan has emerged as the regional leader in gross domestic product (GDP) per capita, overtaking both Russia and China, according to the International Monetary Fund (IMF). IMF data shows that in 2025 Kazakhstan’s GDP per capita reached $14,770, compared to $14,260 in Russia and $13,690 in China. Within Central Asia, Turkmenistan followed with $13,340, while Uzbekistan posted $3,510, Kyrgyzstan $2,750, and Tajikistan $1,430. Kazakhstan also leads among Commonwealth of Independent States (CIS) members, ahead of Georgia ($9,570), Armenia ($8,860), Moldova ($8,260), Belarus ($7,880), Azerbaijan ($7,600), and Ukraine ($6,260). Only the Baltic states recorded higher figures: Estonia ($32,760), Lithuania ($30,840), and Latvia ($24,370). Ireland remained Europe’s leader with $108,920 per capita. The IMF calculates GDP per capita at current prices, offering a snapshot of purchasing power and overall economic wellbeing. Its analysts attribute Kazakhstan’s strong performance to vast mineral resources, with energy and mineral exports continuing to drive growth. Recent years have also seen expansion in raw material processing and production of high value-added goods. The report cites ongoing business reforms, foreign investment inflows, and infrastructure upgrades as key factors enhancing competitiveness. Significant spending is going into transport, logistics, technology, education, healthcare, and social services, bolstering domestic demand and labor productivity. Kazakhstan’s strategic position on trade routes linking Europe and Asia, participation in the Belt and Road Initiative, and active engagement with Russia, China, the EU, and other partners are also seen as growth drivers. The IMF notes that macroeconomic stability is supported by low inflation, a steady tenge exchange rate, and a balanced budget. “The policies of the National Bank and the government are helping to maintain economic stability even amid global challenges,” the report states. The Times of Central Asia previously reported that, according to IMF forecasts, Central Asian economies are expected to grow faster than the global average in 2025.

Economic Growth

World Bank Urges Uzbekistan to Deepen Reforms to Sustain Growth and Empower Private Sector

Uzbekistan has made significant progress on economic reforms since 2017, but more decisive action is needed to sustain high growth rates and foster a dynamic private sector, according to the World Bank’s latest Country Economic Memorandum. The report, which analyzes the country's economic trajectory from 2010 to 2022, outlines key policy recommendations for the coming years. Between 2010 and 2022, Uzbekistan’s per capita GDP grew at an average annual rate of 4.2%, outpacing the regional averages for Europe and Central Asia and for lower-middle-income countries. However, the World Bank notes that this growth has been driven largely by capital accumulation rather than productivity gains, while the private sector remains underdeveloped. “To become an upper-middle-income country by 2030, Uzbekistan needs to boost its growth closer to double digits,” the report states. Achieving this requires sharp improvements in total factor productivity, which hinges on reducing regulatory and market distortions, deepening trade integration, and investing in human capital. State Role and Infrastructure Gaps State-owned enterprises (SOEs) still dominate many sectors of the economy. As of 2020, over 2,000 SOEs accounted for revenues equivalent to 32% of GDP. Many of these operate in areas where private firms could be more efficient. The report recommends accelerating privatization, particularly in competitive sectors, and enhancing transparency in the process. Infrastructure remains a major bottleneck to sustainable growth. While Uzbekistan has taken steps to attract private investment, especially in the energy sector, greater efforts are needed. The World Bank urges targeted investment in electricity and transport infrastructure, prioritizing economically strategic regions such as Tashkent and Qarshi, and improving connectivity between hubs like Samarkand, Navoi, and Khorezm. Trade and Regulation Since 2017, Uzbekistan’s trade-to-GDP ratio has more than doubled, reaching 71.6% in 2022. Still, only 6% of domestic firms are engaged in exporting. To capitalize on its growing trade openness, the report calls for further tariff reductions, streamlined customs processes, and modernized logistics and transport networks. To foster a more competitive business environment, the World Bank recommends comprehensive regulatory reforms. This includes establishing independent regulators in sectors such as energy, rail transport, and telecommunications, and enhancing the mandate of the Competition Promotion and Consumer Protection Committee. If implemented, these reforms could help Uzbekistan accelerate its economic transformation, create more jobs, and strengthen its position in the global economy.

Economic Growth

Kyrgyzstan Reports Strong Economic Growth in Early 2025

Kyrgyzstan’s economy continued its upward trajectory in the first quarter of 2025, with GDP expanding by 13.1%, according to Prime Minister Akylbek Japarov. He credited the surge to positive developments across all key sectors prioritized by the government. The food industry posted remarkable growth of 71%, while the construction sector expanded by 69%. Investments in fixed capital jumped by 90% during the same period. A detailed economic overview published by the Ministry of Economy and Commerce highlighted that Kyrgyz businesses are adapting rapidly to shifting external conditions. The ministry also pointed to increased domestic demand and investment activity as key drivers of growth. "From January to March 2025, about 93% of total investments were directed toward mining, processing industries, information and communications, electricity and gas supply, and the construction of housing and educational institutions," the ministry stated. The construction sector alone contributed three percentage points to GDP growth. However, services remain the backbone of Kyrgyzstan’s economy, accounting for 4.5 percentage points of overall growth. Within the sector, trade made up 27.4%, transportation services 10.3%, and financial intermediation and insurance services another 10.3%. Annual inflation stood just below 7% in the first quarter, with average prices for consumer goods rising by 3.5% during the reporting period.

Economy

Kyrgyzstan’s Economic Boom or Bust? Calls for Inclusive Growth Persist

Kyrgyz President Sadyr Japarov declared late last year that the country’s economic growth had reached historic milestones, with GDP maintaining positive momentum. However, local economists remain skeptical about the broader impact of this growth. In 2020, Kyrgyzstan’s GDP stood at 639 billion KGS ($7.3 billion), according to official data. By the end of 2025, this figure is projected to reach 1.8 trillion KGS ($22 billion). Growth Without Inclusion In an interview with The Times of Central Asia, economist Nurgul Akimova acknowledged that the reported 9% GDP growth and the so-called “leopard’s leap” frequently mentioned by the government are positive developments. However, she stressed that for economic expansion to be meaningful for ordinary citizens, it must be inclusive. "Nine percent growth is not inclusive because it does not create additional jobs. The main drivers of our economic growth are construction, downstream industries, and the financial sector. These sectors do not contribute to improving human capital. In construction, for instance, a significant portion of costs goes toward imported building materials," Akimova explained. According to Akimova, Kyrgyzstan’s economy has followed an inertia-driven trajectory for the past 30 years, avoiding major shocks but also failing to achieve significant breakthroughs. She pointed out that if the garment sector were growing, it would have a greater impact, as it did 15 years ago when Kyrgyz-made clothing was exported to neighboring countries. "For example, a seamstress spends her income on education, healthcare, and consumption. By doing so, she contributes to the development of other inclusive sectors, benefiting society as a whole," Akimova said, adding that while the economy is expanding, it is not improving the welfare of citizens. A People-Centered Economy Akimova emphasized that economic policy should prioritize people’s wellbeing, as failure to do so could erode public trust in the government. She also criticized official comparisons of Kyrgyzstan’s economic growth with other countries, arguing that such assessments lack context. "Officials claim Kyrgyzstan is growing faster than others, but an economy that produces microchips and one that manufactures T-shirts are fundamentally different. These industries require distinct investment levels, equipment, and human capital." Kyrgyzstan’s economy is currently valued at approximately $14 billion. If the country were to sustain an annual 10% growth rate, as authorities suggest, GDP would increase by $1.4 billion per year. Akimova highlighted that this figure represents only 0.5% of Kazakhstan’s economic growth, 0.06% of Russia’s, and a mere 0.0006% of the United States’ GDP expansion. "When we hear claims that we are growing faster than others, we must consider the scale and complexity of economic processes," the economist concluded.

Economic Growth

Uzbekistan’s Economy Grows 6.5%, Investments Reach $34.9 Billion in 2024

In 2024, Uzbekistan’s gross domestic product (GDP) grew by 6.5%, reaching $115 billion, according to Presidential Spokesperson Sherzod Asadov. The announcement was made during a presidential conference focused on investment and economic performance. Foreign investments surged by 1.6 times, totaling $34.9 billion, and 242 large and medium-sized projects worth $10 billion were launched. For the first time, the country’s exports reached $27 billion. According to the official report, the mining, oil and gas, chemical, and agriculture sectors exceeded their investment targets, achieving more than double their expected performance. This highlights the robust growth and prioritization of these key industries. Despite these achievements, challenges persist in several sectors: Textile Industry: Missed its investment target by $17 million. Uztransgaz and Uzmetkombinat: Investments dropped by half. Uzsuvtaminot: Experienced a 20% decrease in investments. Officials from these organizations have been issued strict warnings to improve their performance by the first quarter of 2025 or face further consequences. Additionally, several ministries underperformed in implementing grant plans: Ministries of Ecology, Agriculture, State Assets, Pharmaceuticals, and Forestry: Delivered less than 25% of their grant targets. Ministries of Construction, Transport, Culture, and Tourism: Secured less than $10 million in grants. Ministries responsible for Preschool and School Education, Health, Transport, Sports, Higher Education, Culture, Ecology, Agriculture, Digital Technologies, and Construction were criticized for failing to attract sufficient investments and grants, despite having significant opportunities to do so. The report also highlighted underwhelming investment figures from high-potential countries such as France, Japan, Italy, Hungary, Malaysia, and Spain, which collectively invested less than $100 million in Uzbekistan in 2024. This indicates untapped opportunities for economic partnerships and collaborative growth. As previously reported by The Times of Central Asia, Uzbekistan’s President Shavkat Mirziyoyev has outlined transformative plans to modernize state-owned railway and aviation sectors as part of the country’s long-term development strategy. These reforms aim to increase Uzbekistan’s GDP to $200 billion by 2030, setting an ambitious target for sustained economic growth.