Analysts at the Eurasian Development Bank (EDB) expect Kazakhstan’s economy to maintain steady and resilient growth of nearly 5.5% in 2026, while Central Asia as a whole is set to demonstrate the fastest growth rates of the past decade, according to the bank’s Macroeconomic Forecast for 2026–2028, presented at the bank’s year-end press conference on Dec. 19

Despite a more cautious global outlook, EDB analysts forecast that the region is increasingly driven by domestic investment, infrastructure expansion, and strong consumer demand, insulating it from external volatility better than in previous cycles.

Kazakhstan: investment, oil, and infrastructure drive growth

According to Alexey Kuznetsov, head of the research department, Kazakhstan’s GDP is expected to grow by nearly 6% in 2025, supported by active government-led investment programs and a recovery in oil production.

A major contributor will be Baiterek National Holding, which plans to increase the volume of state-backed financing to 8 trillion tenge (US$15.3 billion) this year. Through recapitalization, the holding is expected to support the launch of over 100 investment projects in manufacturing and the agro-industrial sector, reinforcing Kazakhstan’s industrial diversification agenda. Another key growth driver will be the Tengiz oil field, which is reaching full production capacity following the completion of its expansion project.

“In 2025, oil production is expected to rise by 10%, adding 0.3–0.4 percentage points to overall GDP growth. In 2026, production is forecast to continue increasing by another 3.3%,” Kuznetsov said. 

Beyond hydrocarbons, Kuznetsov highlighted the importance of the National Infrastructure Plan through 2029, which is moving into the implementation phase. In particular, large-scale projects aimed at modernizing the energy and utilities sectors are expected to stimulate investment, employment, and productivity growth across the economy.

Central Asia: fast growth, strategic importance

According to the EDB Chief Economist Evgeny Vinokurov, Central Asia has firmly established itself as a large, fast-growing, and strategically important economic region. This year, EDB expanded its macroeconomic coverage to include Uzbekistan, allowing for a more comprehensive regional analysis. With this addition, EDB’s macroeconomic models now cover four of the five Central Asian countries.

“The Uzbekistan model is fully developed, integrated with regional linkages, and tested. Uzbekistan is a fast-growing economy with ambitious long-term plans, and its inclusion significantly strengthens our regional analysis,”  Vinokurov said.

The region is currently experiencing its strongest growth momentum in more than ten years. In 2025, the EDB forecasts aggregate growth of 6.6%, including 5.9% in Kazakhstan, 10.3% in Kyrgyzstan, 8.3% in Tajikistan, and 7.4% in Uzbekistan.

Looking ahead to 2026, Central Asia is expected to continue expanding at around 6.1%, well above the global average. The region’s combined GDP is projected to exceed $600 billion, driven by sustained investment and robust consumer demand. Country-specific growth forecasts for 2026 include 5.5% for Kazakhstan, 9.3% for Kyrgyzstan, 8.1% for Tajikistan, and 6.8% for Uzbekistan.

Inflation trends and monetary policy outlook

EDB analysts also point to gradual disinflation across Central Asia, creating conditions for a more flexible monetary policy stance in several countries. In Kazakhstan, inflation is expected to slow to 9.7% year-on-year by the end of 2026, after peaking in March–April, according to Kuznetsov.

“The increase in VAT from 12% to 16% will add inflationary pressure in the first quarter, but overall price growth will remain under control. This is due to tight monetary policy, the government’s decision to freeze utility tariff increases, and the introduction of partial price regulation,” he said. 

By the end of 2026, inflation is forecast at 8.3% in Kyrgyzstan, 6.7% in Uzbekistan, and 4.5% in Tajikistan, remaining within target ranges. Vinokurov noted that slowing inflation should open the door to interest rate cuts in several economies, while regional currencies are expected to remain broadly stable.

In Kazakhstan, however, elevated inflation means monetary easing will come later. The EDB expects the base rate to remain at 18% until the second quarter of 2026, after which the National Bank is likely to begin gradually easing policy. By the end of 2026, the base rate is expected to decline to around 14%.

The average exchange rate of the tenge is forecast at KZT 535 per US dollar in 2026.

According to Kuznetsov, downward pressure on the tenge will stem from lower oil prices relative to recent averages and reduced foreign-currency transfers from the National Fund. However, these pressures are expected to be partially offset by record-high interest rates, rising oil export volumes, and the mandatory sale of 50% of export revenues by quasi-sovereign companies, which will support foreign-currency supply in the domestic market.

Broader Eurasian outlook

Across the wider Eurasian region, the EDB expects investment activity and domestic demand to remain the primary growth drivers in 2026, despite moderate global economic growth and persistently high interest rates. The aggregate GDP growth of the seven EDB member states is forecast at 2.3% in 2026. Growth is expected to remain strong in Kyrgyzstan (9.3%), Tajikistan (8.1%), Uzbekistan (6.8%), and Kazakhstan (5.5%), while more moderate growth is forecast for Armenia (5.3%), Belarus (1.8%), and Russia (1.4%).

According to the EDB, investment remains the key driver of growth, particularly in manufacturing, extractive industries, energy, and construction. Commodity markets are moving in different directions: oil prices may fall, while metals and gold could rise, driven by demand for clean energy technologies and central banks buying gold to diversify their reserves.

Global Context: growth slows, risks persist

Globally, economic growth is expected to continue in 2026, but at a more moderate pace. The EDB forecasts the United States (U.S.) GDP growth at around 1.6%, the euro area near 1%, and China at 4.6%, remaining the main engine of global expansion. Vinokurov described the current period as one of adaptation to new global rules, particularly rising trade barriers and tariffs.

In the U.S., investment in IT infrastructure will provide key support, but rising debt servicing costs are increasingly crowding out corporate investment. In Europe, economic growth will be supported by higher government spending on defense and infrastructure, while in China, authorities are actively stimulating domestic demand, a significant structural shift.

Vinokurov also warned of potential “black swan” risks, including corporate defaults and renewed escalation in U.S.–China tensions.

“The era of near-zero interest rates is over. The world has returned to historically normal borrowing costs. While this is not abnormal, it creates challenges: companies and governments must refinance large volumes of debt at much higher rates,” he said.

As a result, a growing share of income will be diverted to debt servicing, leaving less capital available for new investment. Vinokurov concluded that for the global economy, interest payments will act as a macroeconomic brake for some time.