According to the latest edition of European Bank for Reconstruction and Development’s (EBRD) Regional Economic Prospects (REP) report, the short-term regional economic outlook for Central Asia remains positive. Regional growth is set to reach 5.1 percent in 2024 and accelerate to 5.9 percent in 2025 on stronger commodity revenues, infrastructure investment and market-oriented reforms. Despite extreme weather conditions, the Central Asian economies have reportedly continued to grow. Sustained remittance inflows, higher wages and greater international tourism interest in the region have been the main contributors to this growth. The latter was a major catalyst for the development of the hospitality and services sectors in the first half of 2024.
The report also notes the authorities’ intention to develop the countries’ transport, logistics and energy infrastructure, which have made positive contributions to the region’s buoyant GDP figures. It also singles out the Kyrgyzstan and Tajikistan as demonstrating strong GDP growth.
The Kyrgyz Republic is reportedly becoming a growing tourist destination. This is driving catering-sector turnover and boosting tourist transportation revenues. Both remittances and real wages have remained elevated, helping retail and wholesale trade to grow. The Regional Economic Prospects report forecasts the country’s GDP growth to reach 9.0 percent in 2024 before moderating slightly to 7.0 per cent in 2025. Its growth potential stems from the expansion of tourism, investment in infrastructure, and silver and gold exports, but secondary sanctions related to intermediated trade remain a threat.
In Tajikistan, hikes in public-sector salaries, pensions and minimum wages drove domestic demand in the first half of the year, providing a boost to the retail and wholesale trade sectors.
The resumption of precious and semi-precious metal exports increased public infrastructure spending and fixed capital investment were cited as major growth factors.
According to the Regional Economic Prospects report, the country’s GDP growth is projected to reach 8.0 percent in 2024 and 7.0 percent in 2025, thanks to strong domestic demand and elevated infrastructure investment. Fluctuations in remittances from Russia present a major downside risk.
