The European Bank for Reconstruction and Development (EBRD) forecasts robust economic growth across Central Asia, with the region expected to see a 5.1% growth rate in 2024, accelerating to 5.9% in 2025. According to the latest EBRD Regional Economic Prospects report, this positive outlook is fueled by strong commodity revenues, infrastructure investments, and ongoing market-oriented reforms in several Central Asian economies.

Despite challenges such as extreme weather, which caused significant flooding in Kazakhstan and livestock losses in Mongolia, Central Asia continues to show resilience. Key drivers of growth include remittance inflows, rising wages, and a surge in international tourism, which has boosted the hospitality and services sectors in the first half of 2024.

Economic Highlights by Country

• Kazakhstan: The largest economy in Central Asia is projected to grow by 4.0% in 2024, driven by public spending on flood-affected infrastructure and the planned expansion of the Tengiz oil field, which could push GDP growth to 5.5% in 2025. Key sectors contributing to growth include trade, transport, logistics, and IT.

• Kyrgyz Republic: Tourism expansion, infrastructure investment, and strong silver and gold exports are expected to drive GDP growth to 9% in 2024, with a slight moderation to 7% in 2025. However, the country faces potential challenges due to secondary sanctions related to intermediated trade.

• Mongolia: The agricultural sector suffered from livestock losses, but growth in tourism, mining, and manufacturing has kept the economy afloat. The EBRD projects Mongolia’s GDP to reach 5% in 2024, with potential for 8% growth in 2025, depending on external demand from China and commodity price stability.

• Tajikistan: Public-sector wage increases and infrastructure spending have bolstered domestic demand, leading to an 8% growth forecast for 2024. This growth may taper slightly to 7% in 2025. Key sectors driving this expansion include trade, precious metals exports, and capital investments.

• Turkmenistan: The economy is expected to maintain a 6.3% growth rate in both 2024 and 2025, supported by investments in infrastructure and production facilities. However, a potential slowdown in Chinese demand for Turkmen gas could pose a risk.

• Uzbekistan: The country’s economy is forecast to expand by 6% annually over the next two years, driven by remittances, tourism, and industrial production. However, an energy deficit and increasing mineral fuel imports could pose challenges to sustained growth.

Key Growth Drivers in Central Asia

• Infrastructure Investments: Governments are focusing on improving transport, logistics, and energy infrastructure, which have been major contributors to GDP growth.

• Tourism and Services: Tourism is a growing industry, especially in countries like the Kyrgyz Republic and Uzbekistan, spurring further development in related sectors such as hospitality and transportation.

• Remittances and Wages: Sustained remittance inflows, coupled with rising wages, are boosting consumer demand and supporting retail trade.

While the outlook remains positive, the EBRD report also highlights potential risks, such as fluctuations in remittances, energy shortages, and vulnerabilities to external shocks from global commodity markets.