EDB: Central Asian economy grew by 6% in the first half of the year

**EDB: Central Asian economy grew by 6% in the first half of the year**

The aggregate GDP of Central Asian countries grew by 6% in the first half of 2026. The leaders in terms of growth rates were Uzbekistan with 8.5% and the Kyrgyz Republic with 11.1% — both countries demonstrated double-digit investment growth and high consumer activity. This is stated in the new Macroeconomic Review of the Eurasian Development Bank (EDB).

As noted by the EDB, the main growth drivers in the region were investments, infrastructure projects, and resilient consumer demand. In Kazakhstan, the economy expanded by 4.1% in January–July 2026: non-resource sectors added 5.4% and partially offset the decline in oil production, while construction, manufacturing, transport, and trade grew the fastest.

Inflation in the region stabilized at 6.4%, but the picture varies by country: a slowdown was recorded in Belarus, Kazakhstan, and Uzbekistan, while in Armenia, the Kyrgyz Republic, and Tajikistan it accelerated against the background of external price pressure.

EDB analysts point out that the global economy remains resilient despite the energy shock. Since March 2026, transit through the Strait of Hormuz has been disrupted, which pushed Brent crude to an average of $91 per barrel in the first half of the year — 27% higher than a year ago.

Exchange prices for gasoline in the US and Europe rose by about 40% year-on-year, and US commercial and strategic oil reserves by July 17 were about 15% below the level of late February.

According to the bank's estimate, if supply constraints persist for one to two quarters, the impact of the shock on the global economy could intensify. At the same time, high energy prices support the export revenues of Russia and Kazakhstan, while net energy-importing countries face more expensive imports and logistics.

Among individual economies of the region, Armenia's GDP grew by 6.0% in the first half of the year, driven by services, including tourism, construction, and mining; consumer spending increased by 5.7%, and investments by 7.9%. According to the EDB forecast, Armenia's GDP growth for the year will stand at 6.0%.

The economy of Belarus added 2.1% in January–July after 1.5% in the first half of the year, while in July, according to the bank's analysts, growth accelerated to 5.4% compared to 3.5% in June — the main contribution was made by agriculture and improved industrial dynamics. In the absence of new shocks, Belarus's economic growth may exceed 2% by the end of 2026.

Kazakhstan's GDP grew by 4.1% in January–July, and fixed capital investment increased by 7.7% amid state support for capital investments.

The GDP of the Kyrgyz Republic added 11.1% in January–July due to growth in real wages, lending, and government programs: investments grew by 58.8%. EDB analysts expect Kyrgyzstan to maintain its leadership in terms of growth rates in the region by the end of 2026.

Russia's GDP increased by 0.6% in the first half of the year, with growth accelerating to 1.3% in the second quarter after a 0.2% decline in the first quarter. The main support was provided by consumer demand and budget expenditures, while investments contracted by 6.6% in the second quarter amid a prolonged period of high real interest rates.

Tajikistan's economy grew by 8.2% in the first half of the year — exports increased by a record 65.4%, and fixed capital investment by 18.4%. According to the EDB forecast, the country's GDP will increase by 8.3% by the end of the year.

Uzbekistan's GDP grew by 8.5% in the first half of 2026 — this is the highest semi-annual rate in the last five years. The main contribution was made by services, industry, and construction, with fixed capital investment increasing by 17.5% and foreign direct investment by 32.5%.

EDB analysts expect Uzbekistan's economy to grow by about 8% by the end of 2026. At the same time, according to the review, inflation in the country continues to slow down towards the target level.

Inflation in the region in mid-2026 stood at 6.4% compared to 6.5% at the end of 2025. In Russia, inflation accelerated compared to the end of last year under the influence of one-off factors. In Belarus, the rate of price growth decreased to 4.3% and remains below the National Bank's limit of 7%.

In Kazakhstan, the high rate and joint measures of the government and the National Bank allowed inflation to slow down to 9.8% in August compared to 12.3% at the end of 2025. Conversely, the rise in global energy and food prices led to an acceleration of inflation in Armenia, Tajikistan, and Kyrgyzstan.

The region's central banks maintain restrictive monetary conditions. The refinancing rate is 6.5% in Armenia, 9.25% in Belarus, and 7.0% in Tajikistan. The discount rate in Kyrgyzstan is at 12%, and the main rate in Uzbekistan is 14%. In July, the Bank of Russia lowered its key rate to 14%, while the National Bank of Kazakhstan continued to ease policy, lowering its base rate to 16.25%.

A separate analytical section of the review is dedicated to the prospects of upgrading Kazakhstan's sovereign rating. EDB analysts cite moderate government debt, significant external assets, and stable economic growth as factors confirming the potential for a further rating upgrade — a conclusion supported by the recent upgrade of Kazakhstan's rating by S&P Global Ratings to "BBB" with a stable outlook.