ALMATY – Economic growth in Central Asia and the Caucasus (CCA) exceeded expectations in 2025, driven by strong domestic demand, remittance inflows, and higher hydrocarbon exports. This was highlighted at the plenary session, titled Navigating Uncertainty: What’s Next for the CCA Region, organized by the International Monetary Fund (IMF) in Almaty on Oct. 30.
Photo credit: The Astana Times
The event, hosted by the IMF’s Regional Capacity Development Center (CCAMTAC), gathered policymakers and economists from across the region to discuss the region’s integration and challenges.
Stronger growth amid inflation
Opening the plenary session, Governor of the National Bank of Kazakhstan Timur Suleimenov highlighted that economic activity across Central Asia was more dynamic than anticipated in the first six months of this year.
“Strong domestic demand, remittance inflows, and energy exports have supported growth across the region. Our economy has grown at a solid pace of 6.5% this year, with GDP per capita expected to reach $15,700, surpassing most of our neighbors, including Russia and China,” he said.
According to him, the change is reflected by steady reforms and growing regional integration. Suleimenov also emphasized that high inflation remains a challenge, explaining the raise of the base rate to 18%.
“The initiatives include a VAT increase, the removal of inefficient tax exemptions, and limits on transfers from the National Fund. These measures will help decrease the non-oil deficit, support stronger revenues, and improve fiscal balance,” he said.
A year of two stories
IMF Director for the Middle East and Central Asia Jihad Azour described 2025 as a year of two stories, highlighting the challenges faced.
“Most of the developments were challenging — wars, high policy uncertainty, and shifts in global energy policy. Yet, the result in terms of economic performance is promising,” he said.
Azour highlighted that the region has now recorded its third consecutive year of average growth above 5%, cautioning that inflation has picked up across most countries.
“We are still in a period of high uncertainty with risks tilted to the downside from trade measures to volatility in the oil market. Connectivity will be a game changer not only for goods and energy, but also for technology. Regional integration can strengthen resilience and long-term growth,” Azour said.
As for Kazakhstan, the country is set to remain Central Asia’s fastest-growing economy in 2025, with GDP expected to rise by 5.9%, far surpassing the global average of 3.2%, according to the IMF’s Regional Economic Outlook released on Oct. 21.
Reforms and private sector growth
Head of the Delivery Unit at the Agency for Strategic Reforms under the President of Uzbekistan Aziza Umarova shared experience with structural reforms that have also boosted long-term growth.
“In aviation, we moved from one national carrier to twelve private airlines, which significantly contributed to tourism and export growth,” she said.
She noted that Uzbekistan’s transition to a private sector–led economy has created new jobs and diversified growth, helping it respond to the challenges.
“In 2021, the state accounted for 55% of the economy but generated only 7% of formal employment. Reducing the state footprint and empowering the private sector are essential for job creation and long-term prosperity,” she said.
Transition and opportunity
According to the IMF, the CCA region remains one of the few parts of the world where sustained growth continues despite global challenges.
Moderate expansion is also expected in 2026, supported by diversification, digitalization, and enhanced regional connectivity.
“This is a moment of change and a moment of opportunity at the same time. If countries continue reforms and deepen cooperation, the region can move from resilience to long-term prosperity,” Azour said.
Read more in our upcoming November interview with Jihad Azour, where we explore Central Asia’s transformation from a mere transit corridor into a fully integrated economic connector: developing internal markets, harmonized regulations, and modern infrastructure, along with Kazakhstan’s role in this shift and the risks that lie ahead.
