Economic growth forecasts for nations in the Caucasus and Central Asia regions projected to decline according to World Bank estimates.
The World Bank has shared its latest economic outlook for countries in the Caucasus and Central Asia, projecting a general slowdown in growth over the next two years. This assessment is outlined in the organization's report titled Global Economic Prospects.
Among the Caucasian and Central Asian states, Georgia and Azerbaijan are expected to face the most significant declines in real GDP growth. Georgia, currently navigating a political crisis triggered by its strategic shift away from the West, is projected to witness a significant contraction in its annual real GDP growth rate, with a decrease from an estimated 9% in 2024 to 5% by 2026. Azerbaijan's growth rate is anticipated to drop from last year's 4% to 2.4% in 2026, attributed predominantly to an expected decline in oil production. Armenia's growth rate will fall moderately, decreasing from 5.5% last year to 4.6% in 2025.
Most Central Asian states are projected to experience minimal growth or modest dips in the coming years. A rise in oil exports is expected to propel Kazakhstan's growth rate to 4.7% in 2025, up from an estimated 4% in 2024. However, the country's growth rate is forecasted to regress to 3.5% in 2026. Tajikistan is predicted to be Central Asia's poorest economic performer, with a growth rate set to decrease to 5% in 2026 from last year's 8%.
Growth rates in Kyrgyzstan and Uzbekistan are forecasted to remain reasonably stable at 4.5% and 5.8%, respectively, over the next two years. Economic data for Turkmenistan was not reported in the World Bank's analysis.
Some pertinent factors contributing to Central Asia's overall economic outlook include the region's advantages from major trade routes such as the Middle Corridor, which enhances connectivity between China and Europe via Kazakhstan, and initiatives like the EU's Global Gateway strategy. The aggregate GDP for Central Asia in 2024 was approximately $519 billion, with significant investments from institutions like the European Bank for Reconstruction and Development (EBRD). These insights help contextualize the economic trends and projections for the region, although they do not directly correlate with the specific growth rates for individual countries in the World Bank's report.
The economic outlook for Georgia, as outlined in the World Bank's Global Economic Prospects report, predicts a significant contraction in its real GDP growth rate, potentially impacting its financial standing. Azerbaijan, too, faces a drop in growth rate, largely due to a decline in oil production, making it necessary for these nations to examine their business strategies and consider potential interventions in the finance sector.
