BAKU, Azerbaijan, July 23. The Asian Development Bank (ADB) has revised its economic outlook for the Caucasus and Central Asia upward, projecting regional growth at 5.5% in 2025 and 5.1% in 2026, Trend reports.
The revision, released in the latest update to the ADB’s regional outlook, reflects stronger-than-expected performance in Kazakhstan, while growth trajectories in other countries remain broadly in line with earlier forecasts.
Kazakhstan's improved economic trajectory was the main driver behind the region-wide upward revision, although the ADB did not provide detailed figures for the country in this update.
Elsewhere, economic performances varied widely. Armenia experienced a marked slowdown, with GDP growth falling to 4.4% in January–April 2025, compared to 12.9% during the same period last year. The deceleration is largely attributed to a contraction in industrial output.
Azerbaijan also saw its growth ease significantly, with expansion slowing to 1.5% in the first five months of 2025, down from 4.2% a year earlier. The decline is mainly due to reduced hydrocarbon production.
In contrast, Georgia sustained its strong economic momentum, growing 9.3% in the first quarter of 2025, nearly matching the 9.4% growth recorded in Q1 2024. The performance was supported by resilient trade, robust tourism inflows, and stable remittances.
The Kyrgyz Republic saw a notable acceleration, with GDP increasing 13.1% in the first quarter of 2025, up from 10% the previous year. The ADB cited solid domestic demand and rising public investment in infrastructure as key growth drivers.
Tajikistan posted 8.2% growth in the January–April period, bolstered by consumer spending, remittances, and a surge in mining activity.
Turkmenistan is expected to post 6.5% growth for the first half of 2025, driven by public investments and strong net exports of natural gas.
Uzbekistan’s economy expanded by 6.8% in Q1 2025, reflecting continued strength in domestic demand and investment.
The ADB cautioned that geopolitical risks, particularly the renewed conflict in the Middle East since mid-June, could weigh on economic prospects for Armenia and Uzbekistan. Meanwhile, recently imposed U.S. tariffs are expected to have a limited impact on the region as a whole, due to relatively low export exposure to the American market.
Despite these challenges, the region's medium-term outlook remains broadly positive, underpinned by resilient domestic demand and strategic public investments in several economies.
