ASTANA – The Eurasian Development Bank (EDB) on June 15 released its macroeconomic outlook for 2026-2028, forecasting that Central Asia’s economy will expand by more than 6.5% in 2026 and exceed $600 billion in gross domestic product for the first time.
Photo credit: dknews.kz
The bank expects continued strong growth across its member states, led by the Kyrgyz Republic at 10.2%, Tajikistan at 8.3%, and Uzbekistan at 7.9%. Armenia’s economy is projected to grow by 6%, while Kazakhstan is expected to expand by 5.5%.
Despite a slowing global economy linked to the conflict in the Persian Gulf, the combined GDP of the EDB’s seven member countries, including Armenia, Belarus, Kazakhstan, the Kyrgyz Republic, Russia, Tajikistan and Uzbekistan, is projected to surpass $3.5 trillion in 2026.
“The conflict in the Persian Gulf has affected oil and gas prices, logistics, and overall business sentiment. Inflationary pressures are intensifying while global business activity is slowing. As a result, we expect global economic growth to decelerate to 2.5% in 2026, the lowest level in more than 15 years excluding the pandemic year of 2020,” said Alexey Kuznetsov, head of the EDB’s Directorate for Analytical Work.
Kuznetsov noted that the impact on the region could vary. Higher energy prices are supporting export revenues and government budgets in Russia and Kazakhstan, while energy-importing countries face rising inflation driven by more expensive fuel, food and transportation costs.
“Despite these external challenges, the region’s economies maintain a solid degree of resilience. Central Asia will remain one of the fastest-growing regions in the world and is becoming larger, more visible and increasingly attractive to investors,” he said.
Kazakhstan
Aigul Berdigulova, a senior analyst at the EDB’s Country Analysis Center, presented country-specific forecasts for Central Asia, including projections for GDP growth, inflation, interest rates and exchange rates.
For Kazakhstan, the EDB forecasts economic growth of 5.5% in 2026, a more optimistic outlook than those of several international financial institutions and government agencies.
Berdigulova attributed the forecast to the government’s industrial policy, the launch of new manufacturing facilities, and the completion of previously announced industrial projects. She also cited nearly 200 investment projects worth around 1.7 trillion tenge ($3.4 billion) and the implementation of the national infrastructure development plan as major growth drivers.
High oil prices are expected to further boost export earnings.
The bank forecasts inflation to slow to 9.7% in 2026, although it will remain above the central bank’s target range. Elevated global food and fertilizer prices and persistent inflation expectations are expected to limit the pace of disinflation.
At the same time, tight monetary policy, a relatively strong tenge and government measures to limit regulated price increases are expected to help moderate inflation.
The EDB expects Kazakhstan’s base rate to decline gradually, reaching 16% by the end of 2026 and around 12% by the end of 2027. The tenge is projected to trade at around 500 tenge per U.S. dollar by the end of 2026.
The Kyrgyz Republic
The Kyrgyz Republic is expected to remain the region’s fastest-growing economy, with GDP growth forecast at 10.2% in 2026.
According to Berdigulova, growth will be supported by the government investment program. In 2025, the country attracted a record $980 million in sovereign financing, the highest level in 12 years. The funds will be directed toward long-term infrastructure development.
“The government plans to implement around 200 projects through 2030 in sectors including energy, tourism, industry, education and healthcare,” she said.
Inflation is forecast to reach 11.5% in 2026, up 3.2 percentage points from previous projections due to stronger price pressures in global commodity markets, wage increases in the public sector, and higher excise taxes and utility tariffs.
However, a stable som exchange rate and tighter monetary policy are expected to help contain inflation, which the bank forecasts will decline to 7% by the end of 2028. The policy rate is expected to remain at 12% throughout the forecast period.
Tajikistan
According to Berdigulova, Tajikistan is projected to post GDP growth of 8.3% in 2026, supported by strong consumer demand, rising investment and continued inflows of remittances, aided by a stronger Russian ruble.
“Government policies are expected to sustain investment demand, particularly in the energy sector. Large-scale projects, including the Rogun and Nurek hydropower plants, remain key priorities,” she said.
Higher global prices for gold and nonferrous metals are also expected to support export revenues.
Berdigulova noted that inflation is forecast at 4.7% in 2026 and is expected to stabilize near 5% in subsequent years, remaining within the central bank’s target range despite upward pressure from rising global commodity and food prices.
Uzbekistan
“Uzbekistan is expected to remain one of the region’s top performers, with GDP growth projected at 7.9% in 2026,” said Berdigulova.
According to the EDB, this will represent the country’s strongest growth rate in a decade outside the post-pandemic rebound of 2021.
Economic expansion is expected to be driven by high levels of fixed capital investment, which will support industrial production, services and construction activity. Fiscal policy will also remain a key growth driver.
Elevated gold prices are expected to boost export revenues, while rising wages and remittance inflows will continue to support consumer spending.
Berdigulova said the bank expects inflationary pressures to ease gradually as relatively tight monetary policy and a stronger Uzbek som encourage savings and reduce imported inflation.
“Nevertheless, strong domestic demand and higher global commodity prices are expected to continue putting upward pressure on costs in agriculture and transportation. The EDB forecasts inflation will remain close to the Central Bank of Uzbekistan’s target range during 2026-2028,” she said.
