The economies of Central Asia and Mongolia will remain resilient to geopolitical shocks and post the highest growth rates among the European Bank for Reconstruction and Development (EBRD) countries of operation in 2026 and 2027, according to a press release by the EBRD. The latest Regional Economic Prospects report, published on 3 June 2026, projects regional growth of 5.6 per cent in 2026, moderating to 5.3 per cent in 2027. The forecast covers Kazakhstan, the Kyrgyz Republic, Mongolia, Tajikistan, Turkmenistan and Uzbekistan. The EBRD has revised down its 2026 forecast for the Kyrgyz Republic to reflect the expected impact of new European Union (EU) sanctions. Energy price volatility, supply-chain disruptions, economic sanctions and slower growth in Russia and China rank among the key risks identified.
Economic activity in the region has remained resilient in early 2026 but is showing signs of gradual moderation. Strong domestic consumption and investment continue to underpin expansion, with the services sector emerging as a key driver alongside construction and manufacturing. Downside risks have recently intensified, however, linked to slower growth in the region’s largest trading and economic partners. Growth prospects remain robust overall but are increasingly dependent on the pace of domestic reforms. Efforts to strengthen resilience to external shocks will also shape the outlook.
In Kazakhstan, the construction, transportation and manufacturing sectors maintained their momentum in Q1 2026, though the extractive industry contracted by 11.4 per cent year on year following disruptions to the Caspian Pipeline Consortium (CPC) pipeline and an incident at the Tengiz oil field. Fixed capital investment expanded 6.4 per cent year on year in the first three months of 2026. GDP growth is projected to moderate to 4.7 per cent in 2026 and 4.5 per cent in 2027. In the Kyrgyz Republic, fixed capital investment rose 25.5 per cent year on year, with growth projected at 8.7 per cent in 2026 and 7.0 per cent in 2027. Mongolia’s industrial output expanded 61.2 per cent year on year in the first quarter, with real GDP forecast at 5.5 per cent in both 2026 and 2027.
Tajikistan’s economy grew by an estimated 8 per cent year on year in the first quarter, with fixed capital investment up 34.2 per cent, supported in part by the Rogun hydropower project. In March 2026, Moody’s upgraded Tajikistan’s sovereign credit rating to B2 with a stable outlook, citing the country’s “continued economic resilience and improved fiscal management”. GDP growth is forecast to ease to 7.9 per cent in 2026 and 7 per cent in 2027. Turkmenistan’s economy grew 6.3 per cent on the year in the first quarter, with GDP forecast to expand 6.3 per cent in both 2026 and 2027. The authorities have launched the fourth phase of the Galkynysh gas field expansion, expected to provide additional support to medium-term activity.
Uzbekistan’s real GDP expanded 8.7 per cent year on year in the first quarter of 2026, with industry and construction advancing 8 per cent and 15.5 per cent, respectively. The economy is forecast to grow 6.5 per cent in 2026 and 6.0 per cent in 2027. Upside potential could stem from faster-than-expected progress on privatization. Downside risks are mainly associated with an economic slowdown in Russia and inflationary spillover effects from the conflict in the Middle East. Across the region, the EBRD underscores that prospects remain robust but increasingly hinge on domestic reforms and external resilience.
