Inflation - The Times Of Central Asia

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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.

economic slowdown

Tajikistan Predicts Economic Slowdown Amid Declining Remittances

Tajikistan's economic growth is projected to decelerate to 7.5% in 2025, largely due to weakening domestic demand, according to the latest regional economic review by the Eurasian Fund for Stabilization and Development (EFSD). Migrant Remittances: A Key Factor The anticipated slowdown is primarily attributed to a decline in remittances from labor migrants, which have historically formed a substantial share of Tajikistan’s GDP. EFSD analysts forecast that from 2025 to 2027, the volume of transfers will gradually normalize after peaking between 2022 and 2024. Despite this decline, the EFSD maintains that Tajikistan’s balance of payments will remain stable, helped in part by reduced capital outflows, including foreign currency purchases. Previously, the World Bank reported that migrant remittances accounted for 45% of the country’s GDP in 2024, the highest proportion globally. By comparison, remittances made up 24% of GDP in Kyrgyzstan and 14% in Uzbekistan. The Asian Development Bank (ADB) expects this share to fall to 37% in 2025. Inflation Pressures Rise EFSD economists also warn of mounting inflationary pressures. Inflation is projected to approach the upper limit of the National Bank of Tajikistan’s target corridor, 5% with an acceptable deviation of ±2 percentage points. Over the medium term, inflation is expected to stabilize within the target range. Food prices remain the primary risk to price stability, the EFSD cautioned. Exports, External Risks, and Trade Barriers The ADB has also published a forecast supporting a more restrained outlook, highlighting falling global prices for Tajikistan’s key exports, metals and agricultural goods, including aluminum, as an added drag on growth. Additionally, regional trade barriers are posing challenges. Uzbekistan recently raised import duties on Tajik cement, a move seen by analysts as part of a broader trend of protectionist policies in neighboring countries. External conditions are also exerting pressure. Economic slowdowns in Russia and China, Tajikistan’s primary trading partners, could suppress both export revenue and remittances, the majority of which come from migrant workers in Russia. GDP Projections and Sector Breakdown According to the ADB’s baseline scenario, Tajikistan’s GDP growth is expected to slow to 7.4% in 2025 and 6.8% in 2026. In contrast, Tajik authorities aim to maintain growth at no less than 8%. In 2024, the economy grew by 8.4%, a 0.1 percentage point increase over the previous year. GDP totaled 153.4 billion somoni (approximately $14 billion). The sectoral composition of GDP included agriculture (22.8%), industry (16.9%), trade (15.2%), transportation (9.3%), construction (8.1%), taxes (9.4%), and other services (18.3%). Despite the projected slowdown, ADB experts remain cautiously optimistic. They cite sustained investment in energy and industrial sectors, expanded agricultural and service output, and continued, albeit diminished, remittance inflows as key factors that will support Tajikistan’s economic momentum.

Food Security

High Food Costs and Growing Waistlines: Kazakhstan’s Struggle with Rising Obesity

More than half of Kazakhstan’s population is overweight or obese, even as food prices in the country continue to climb. Deputy Prime Minister Serik Jumangarin recently highlighted that nearly 50% of consumer spending is allocated to food and beverages. In response, members of the Senate and the upper house of parliament are advocating for stricter regulations on food quality. Aniko Nemeth, an expert on food safety and nutrition at the Food and Agriculture Organization’s (FAO) regional office for Europe and Central Asia, pointed out the country’s obesity crisis during a Senate hearing on food security. Drawing from data from the Kazakh Academy of Nutrition, she noted that 55.5% of women and 49.2% of men in Kazakhstan are overweight or obese. At the same time, 5.6% of the population suffers from malnutrition. The paradox highlights a larger issue: the rising cost of a healthy diet. According to Nemeth, the price has increased by at least 8% over the last eight years. Urban residents are more affected than rural residents who can supplement their diets with homegrown produce. Deputy Prime Minister Jumangarin acknowledged that food prices are a major burden for the population. He outlined measures to address the issue, including constructing 92 modern fruit and vegetable storage facilities by the end of next year. With a capacity of 700,000 tons, these facilities aim to stabilize seasonal prices. Additionally, subsidies for seeds will be increased to support farmers, focusing on reducing dependency on foreign hybrids. Jumangarin also addressed the dependence on imported meat, which drives up costs. He announced plans for a commercial livestock farming project in the Turkestan region, modeled on Australia’s practices. Expected to launch in 2025, the initiative aims to lower domestic meat prices and increase sausage production. Furthermore, Kazakhstan is set to become self-sufficient in poultry production and may even begin exporting chicken meat within a few years. Kazakhstan’s cheese production currently meets only 57% of domestic demand. New production projects are underway to bridge the gap, including partnerships with global leaders like French-owned Lactalis, the world's largest dairy products group. Jumangarin revealed plans for a facility in the Akmola region and another in Kostanay to produce 2,000 tons of cheese annually. These efforts coincide with an anticipated surplus in milk production from newly established dairy farms. Despite these efforts to make food more affordable, senators believe legislative action is needed to address the obesity epidemic. Arman Utegulov, representing the agricultural ministry of Kazakhstan, proposed a law to regulate genetically modified organisms (GMOs) and foods treated with pesticides and antibiotics. He also called for stricter oversight of laboratories and trade centers to ensure food quality. “Excessive hormones in animal feed lead to chronic diseases,” Karimovich warned. He suggested amendments to existing legislation and even the potential return of veterinary laboratories to state control to tackle these issues. Kazakhstan faces a dual challenge: ensuring food affordability and combating rising obesity rates. While government initiatives aim to support domestic agriculture and stabilize food prices, balancing quality and cost remains critical....

Food Security

Kyrgyzstan Reports Price Increases for Consumer Goods

According to the National Statistical Committee of Kyrgyzstan, prices for meat, alcoholic beverages, and tobacco products have risen significantly. The largest price increases were observed in Bishkek and the Issyk-Kul region. “Prices for alcoholic beverages and tobacco products, food products, and tariffs for services rendered to the population have increased. At the same time, prices for food products and non-alcoholic beverages decreased,” Deputy Chairman of the Statistical Committee Baktybek Shokenov told a press conference in Bishkek. He said prices fell for fresh fruits and vegetables, cereals, raw milk, eggs, and vegetable oil in the first eight months of 2024. On the contrary, prices for meat, fish, potatoes, salt, rice, cottage cheese, flour of the highest grade, pasteurized milk, sugar, and butter increased significantly. Kyrgyz people have recently complained about a sharp rise in meat prices. Some reports say they have risen by 100 KGS ($1.2) per kilo in six months. The main reason for the sharp rise in meat prices is increased exports; because Kyrgyz meat prices abroad are higher than domestic prices, domestic prices are also rising. Most meat products are exported to neighboring Uzbekistan. Today, a kilogram of beef costs about 650-680 KGS ($8) in the bazaar, although half a year ago, it cost 550-600 KGS ($6-6.5).

ADB Economy Inflation Export/Import Security

ADB: Central Asia’s Economic Growth and Decreasing Inflation in 2024

The Asian Development Bank has published its latest report, “Asian Development Outlook (ADO) July 2024: Steady Growth, Slowing Inflation,” in which it has increased its forecast for economic growth in Central Asia from 4.3% to 4.5% in 2024. In the first quarter (Q1) of 2024, the Kyrgyz Republic is expected to have grown at a rate of 8.8% thanks to robust service and construction industry output supported by both foreign and domestic investment. Other regional economies have also experienced solid economic activity. As a result of a notable increase in exports, which included gold sales, Tajikistan maintained its robust economic trajectory in Q1 2024, with an 8.2% growth rate. Net gas exports and government investment, meanwhile, are Turkmenistan’s primary sources of growth. The first quarter of 2024 also saw 6.2% growth in Uzbekistan, due to a spike in fixed capital investment. The growth prospects of Kazakhstan, however, the largest economy in the region, remain unchanged. With the main growth drivers being construction, manufacturing, and services, GDP expanded by 3.7% in Q1 2024. This year, manufacturing and construction will continue to be the primary forces behind economic expansion. Strong building growth will be supported by government assistance to victims and restoration of damaged infrastructure following the worst floods in thirty years. Mining is also anticipated to contribute significantly to Kazakhstan’s medium-term growth following the Tengiz oil field expansion project's completion in Q2 2025. The ADB has also lowered inflation forecasts for 2024 and 2025. In May 2024, the Kyrgyz Republic experienced a decrease in inflation from 11.3% to 4.6%, primarily due to fluctuations in the prices of essential commodities. Other regional economies are also experiencing a reduction in inflationary pressures. A steady exchange rate and relatively restrictive monetary policy decreased Kazakhstan's inflation rate to 9.0% from 18.5% from 2023 to January–May 2024. Inflation in Tajikistan for the first four months of 2024 was 3.8%. Inflation in Uzbekistan has also dropped from 11.4% in the previous year to 9.2% in the first five months of 2024.

Finance Investments Economy Inflation Foreign debt GDP

IMF: Uzbekistan’s Foreign Debt to Decrease by 10% in 2029

According to a new report issued by the International Monetary Fund, in recent years and against uncertainties from the pandemic and Russia’s war in Ukraine, Uzbekistan's rapid growth in economy is set to continue in tandem with a significant decline in poverty. Despite a slowdown in the development of trade partners and the removal of the fiscal stimulus in 2023, a strong economic growth is predicted for this year and supported in the medium term, by the completion of budgetary consolidation, ongoing structural reforms, and continuing capital inflows, demonstrates the government’s commitment to promoting market-oriented reforms to further Uzbekistan’s economic development. Challenges still remain, however, in the large state footprint in the economy and last year’s expansionary fiscal policy, which the authorities determined to persevere in their reform efforts, must address to advance sustainable and inclusive growth. The monetary policy which has reduced inflation must continue until it reaches the Central Bank of Uzbekistan's target. Sustaining a high real policy rate, tight fiscal and macro-prudential policies, and supportive structural reforms would gradually reduce inflation to the target by the end of 2027 and the CBU should stand ready to increase its policy rate if the energy price reform leads to broader price pressures and raises inflation expectations. The government should continue efforts to accelerate the restructuring and privatization of state enterprises, eliminate preferences for state-owned enterprises and unbundle large enterprises to increase competition and improve the business environment. The authorities are accelerating efforts for WTO accession and undertaking measures to bolster external competitiveness and export diversification; opening markets and reducing monopolies would boost growth and help reduce inflation. According to the IMF’s analysis, it will reach 60.1% of GDP at the end of 2024, and the country's total external debt is expected to decrease to 51% of GDP by 2029. Similarly, from 33% of GDP at the end of 2024, government-guaranteed external debt is likely to decline to 27% by 2029. Several factors contribute to these positive statistics. The government of Uzbekistan aims to limit the budget deficit to 3% of GDP by introducing annual limits on the budget deficit and new debts. In addition, the 2023 public debt law limits state-guaranteed debt to 60% of GDP, with proposals for debt reduction if it reaches 50%. As stated in the report, the authorities emphasized their commitment to maintaining a moderate level of debt and noted that the government’s goal of reducing and maintaining the medium-term fiscal deficit at 3% of GDP would send purchasing power parity and external borrowing as a share of GDP downwards