EBRD lowers economic growth forecast for Central Asia

Despite this downward adjustment, EBRD experts maintain an optimistic outlook for the region’s growth prospects in 2025, forecasting a GDP growth rate of 5.9%. The projected economic recovery is largely attributed to several factors, including rising revenues from the export of raw materials, significant investments in infrastructure, and ongoing market reforms.

Additionally, the increase in wages, a surge in remittances, and growing interest from international tourists are contributing to the positive trajectory of the region's economy. These latter factors are particularly noteworthy in Uzbekistan, where the services and industrial production sectors have shown considerable strength. However, analysts warn that an ongoing energy supply deficit may hinder further growth opportunities.

For Uzbekistan specifically, the EBRD has projected a GDP growth rate of 6% for both this year and next, a slight decrease from the previous spring estimate of 6.5%.

Kazakhstan also faces a downward revision in its growth forecast, now set at 4%, partly due to recent flooding in the northern regions. Nevertheless, spending on infrastructure recovery could potentially accelerate economic growth in the future. Key sectors driving Kazakhstan's economy include trade, transportation, services, and information technology. A growth rate of 5.5% is anticipated by 2025, buoyed by the expansion of oil production at the Tengiz field.

In Kyrgyzstan, economic growth is expected to be robust, with a forecasted rate of 9% for 2024 and 7% for 2025. The tourism sector is a primary driver of this growth, alongside infrastructure investments and gold and silver exports, although secondary sanctions pose ongoing risks.

Tajikistan is projected to achieve growth driven by the export of precious and semi-precious metals, infrastructure spending, and wage increases. The growth forecast for Tajikistan stands at 8% for 2024 and 7% for 2025, though fluctuations in remittances from Russia could pose challenges.

Turkmenistan is anticipated to see an average economic growth rate of 6.3% in both 2024 and 2025, propelled by government investments, streamlined transit procedures, and increased transportation activities. However, a potential slowdown in the Chinese economy may adversely impact gas exports.

Overall, while the EBRD has lowered its growth forecasts for Central Asia in the short term, the long-term outlook remains hopeful, reflecting the region's resilience and potential for recovery.