ADB Revises Growth Forecast Upward for Central Asia Amid Inflationary Pressures
The Asian Development Bank (ADB) has raised its economic growth forecast for the Caucasus and Central Asia to 5.5% in 2025 and 5.1% in 2026, up from its previous projections of 5.4% and 5.0%, respectively, according to the latest edition of the Asian Development Outlook.
The improved forecast is largely attributed to stronger-than-anticipated government spending on capital investments and social services in Kazakhstan, as well as the earlier-than-expected expansion of the Tengiz oil field, which is expected to boost the country’s mining output.
“OPEC+ raised oil production for a third consecutive month on May 31, 2025, further bolstering growth prospects for Kazakhstan as it operates at maximum available capacity,” the report noted. Growth projections for other countries in the region remain unchanged.
Despite the positive economic outlook, the ADB warned of rising inflation across the region. The Bank revised its inflation forecast for Central Asia to 7.8% in 2025 and 6.7% in 2026, compared to earlier estimates of 6.9% and 5.9%, respectively. The upward revision is primarily driven by inflationary pressures in Armenia, Kazakhstan, and the Kyrgyz Republic.
In Kazakhstan, inflation rose to 10.1% from 9.0% earlier in the year, driven by increases in utility tariffs despite the continued application of tight monetary policy. Armenia experienced a sharp rise in inflation from 3.0% in January to 5.8% in May, compared to just 0.8% during the same period last year. Inflation in the Kyrgyz Republic reached 8.0% in May, mainly due to the country's dependence on imports of food and energy.
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