Infographic: Development of Central Asian Economies in the First Half of 2026

Economic Development Trends by Country

The economy of Kazakhstan grew by 4.1% in January–June 2026, compared with 6.2% a year earlier.

The main constraint was the extractive industry, where output declined by 4.0%, compared with an 8.4% increase in the first half of 2025. Against this background, overall industrial growth slowed from 6.5% to 3.5%.

Manufacturing was the main driver of industrial growth, with output growth accelerating from 5.5% to 9.8%. This partly offset weakness in the extractive sector and indicates an expansion of the non-resource-based production base.

Construction maintained strong growth at 15.2%, compared with 18.4% a year earlier. Agricultural growth accelerated from 3.3% to 4.4%.

Investment increased by 9.6%, although the growth rate was half the level recorded in the first half of 2025, when it reached 19.3%. Lending to the economy also slowed, from 22% in the first half of 2025 to 17% in the corresponding period of this year.

Consumer demand continued to grow, albeit moderately. Retail trade increased by 3.8%, compared with 6.6% a year earlier, while wholesale trade grew by 6.6%, compared with 9.2%.

Inflation slowed this year, reaching 5.1% in June compared with the beginning of the year, versus 7.0% a year earlier, although it remains relatively high.

Foreign trade turnover is recovering in 2026 following last year’s decline. In the first five months of 2026, trade turnover increased by 4.3% to $56.3 billion, exports rose by 1.6%, and imports increased by 7.7%. During the same period a year earlier, total trade had declined by 4.5%, exports by 9.2%, while imports had grown by 2.2%. Thus, foreign trade has returned to growth, although imports have been its main driver.

Kyrgyzstan continues to demonstrate record growth rates, with GDP increasing by 11.9%, compared with 11.3% in the first half of 2025. The main source of acceleration was investment and construction activity. Investment increased by 64.3%, compared with 33.9% a year earlier, while construction expanded by 69.6%, versus 33.1%. Rapid credit growth also continued to support economic activity, reaching 45% as of June 2026. This performance indicates a sharp expansion in capital investment.

Industrial output grew by 12.7%, maintaining a pace close to last year’s 12.5%. Within the sector, manufacturing growth accelerated from 12.7% to 15.1%, while mining increased from 10.4% to 12.8%. Agriculture also accelerated, expanding by 4.3%, compared with 1.9% a year earlier. Thus, rapid economic growth became broader across sectors.

Some cooling was observed in services and the consumer sector. Despite stronger retail trade growth of 13.5%, compared with 10.1% a year earlier, wholesale trade declined by 1.9% after growing by 2.1%, while growth in the overall trade sector slowed from 21.3% to 5.0%. Services also expanded more slowly, by 5.3% compared with 10.1%. This indicates that economic growth is increasingly concentrated in investment and production.

Against the backdrop of an overheating economy, consumer inflation continued to accelerate. Prices increased by 5.5% from the beginning of the year, compared with 4.0% in June 2025.

Foreign trade showed sluggish growth of 1% in the first five months, reaching $6.3 billion. Imports increased by 2.8%, while exports declined by 9.3%, further widening the trade deficit.

The economy of Tajikistan grew by 8.2%, virtually matching the result recorded in the first half of 2025, when growth stood at 8.1%.

At the same time, several economic sectors experienced slower growth compared with last year. Industrial output growth slowed to 14.1%, from 24.0% a year earlier. Mining declined by 6.7%, while manufacturing expanded by 26.0%. Agriculture grew by 7.2%, compared with 9.7% a year earlier, while services increased by 10.6%, versus 12.8%.

At the same time, investment demand strengthened. Fixed capital investment increased by 18.4%, compared with 14.6% a year earlier. Credit growth also accelerated: in June, lending to the economy increased by 25% year-on-year, compared with 19% growth in June 2025.

Consumption also provided support, with retail trade increasing by 31.8% and the overall trade sector expanding by 26.1%.

Against the backdrop of stronger domestic demand, inflation accelerated to 2.4% in June compared with December of the previous year, versus 1.8% in June 2025. Nevertheless, it remained the lowest among the countries of the region.

Foreign trade became one of the main drivers of economic acceleration. In the first half of the year, trade turnover increased by 44.2% to $6.8 billion. Exports surged by 65.4% to $1.6 billion, while imports increased by 38.8% to $5.2 billion. These figures significantly exceeded last year’s performance.

According to official data, the economy of Turkmenistan grew by 6.3% in the first half of 2026, the same rate as a year earlier. Capital investment amounted to 16.5% of GDP, although its growth slowed to 4.3%, compared with 15.6% a year earlier. Retail trade increased by 10.1%. Foreign trade turnover grew by 7.5%, compared with 2.9% in the first half of 2025, indicating a stronger contribution from the external sector.

Uzbekistan demonstrated the strongest acceleration in GDP growth, from 7.2% in the first half of 2025 to 8.5% in the first half of 2026. Economic growth was recorded across all sectors, with the strongest momentum coming from services, trade, and capital investment.

The volume of market services increased by 16.9%, compared with 13.3% in the first half of 2025. In particular, ICT services maintained high growth of 22.1%, while transport services increased by 14.7%. Retail trade expanded by 20.2%, more than twice the 9.7% growth recorded a year earlier, while wholesale trade accelerated from 12.4% to 16.5%.

A sharp acceleration in capital investment became one of the key distinguishing features of the first half of 2026. Fixed capital investment increased by 17.5%, compared with 8.5% in January–June 2025.

Among the production sectors, industry grew by 8%, compared with 6.6% a year earlier. Manufacturing increased by 8.8%, while mining expanded by 2.1%, once again demonstrating the leading role of processing industries. Agriculture also accelerated from 4% to 4.7%, while construction growth increased from 10.7% to 13.8%.

Another positive signal was the slowdown in inflation to 3.3% from the beginning of the year, compared with 4.2% in June 2025, despite accelerating economic growth and stronger investment and consumer demand.

Foreign trade turnover increased by 7.4% in the first half of the year to $41 billion. Exports declined by 8.8% to $15.9 billion, while imports increased by 21% to $25.2 billion. It should be noted that the decline in exports was associated with lower gold shipments abroad. Excluding gold, exports increased by 32%.

Regional Economic Trends

Economic growth remains high across Central Asia, although the gap between countries is widening. The regional picture is shaped by double-digit growth in Kyrgyzstan and accelerating growth in Uzbekistan, while Kazakhstan has experienced a noticeable slowdown.

Investment and construction have become the main common drivers of growth. The investment cycle supports both current economic expansion and the creation of future production capacity. However, rapid growth also increases overheating risks for some economies in the region. Domestic demand has likewise become one of the key factors supporting economic activity across Central Asia.

A positive structural development is the faster growth of manufacturing in almost all countries. This creates a foundation for export diversification, the development of regional production chains, and reduced dependence on commodity market conditions.

In foreign trade, the general regional trend is that imports are growing faster than exports in most economies.

Inflation trends remain uneven. Compared with the first half of 2025, inflation slowed in Kazakhstan and Uzbekistan but accelerated in Kyrgyzstan and Tajikistan. In this environment, rapid growth in domestic demand requires the continued pursuit of cautious monetary policy.

External Environment

The economic performance of the region’s countries developed amid a noticeable deterioration in the external environment. Growth among Central Asia’s major trade and economic partners slowed, inflationary pressures intensified again due to an energy shock, while global gold, fuel, and food markets were characterized by heightened volatility.

Central Asia’s external economic environment in the first half of 2026 was characterized by slower growth in the largest neighboring markets.

In China, GDP grew by 4.7% year-on-year in January–June, compared with 5.3% a year earlier.

In the European Union, GDP increased by 0.8% in the first quarter compared with the corresponding quarter of 2025.

In Russia, according to the Ministry of Economic Development, GDP grew by only 0.2% in January–May. Following declines in January and February, the economy returned to weak positive growth in the spring. For Central Asia, this increases the risks of slower export growth to Russia and weaker remittance inflows, although the continuing labor shortage supports demand for migrant workers.

The gold market was characterized by extreme fluctuations. The price reached $5.4 thousand per troy ounce in January before declining to $4 thousand in June. Despite the correction, prices remained historically high, supporting export revenues and investment activity in the region’s gold-producing countries.

In fuel and energy markets, geopolitical escalation triggered another price shock. Armed conflicts and sanctions-related confrontation remained the main sources of uncertainty. Geoeconomic fragmentation is intensifying as a result of tariff restrictions, the restructuring of supply chains, and the formation of competing technological ecosystems.

Against this background, the results of the first half of 2026 confirm the resilience of Central Asian economies.

Conclusion

In the first half of 2026, Central Asian economies maintained resilient and, in most cases, high growth rates despite slower growth among their largest external partners, rising geopolitical tensions, and volatility in global commodity markets.

Investment, construction, manufacturing, trade, and services were the main drivers of growth. However, in some countries, faster import growth, inflationary pressures, and dependence on commodity market conditions continue to create risks for macroeconomic stability.

In the second half of the year, the key factors will be the sustainability of investment projects, the ability of industry to expand exports, and inflation dynamics. For the region as a whole, the priority remains to transform the current high growth rates into more productive and balanced growth through deeper processing, stronger mutual trade, improved transport connectivity, and the development of cross-border production chains.

Ruslan Abaturov, CERR