ADB revises inflation and GDP forecasts for Caucasus and Central Asia region

The Asian Development Bank (ADB) has downgraded its inflation forecast for the Caucasus and Central Asia region and upgraded its regional GDP growth forecast for 2025–2026.

According to Report, citing ADB’s July outlook, the bank now expects inflation in the region to reach 7.8% in 2025 (previous forecast – 6.9%) and 6.7% in 2026 (previous forecast – 5.9%).

“The revision reflects stronger inflationary pressures in Armenia, Kazakhstan, and Kyrgyzstan. Annual inflation in Armenia rose to 3% in January–May 2025, compared to 0.8% during the same period last year. In Kazakhstan, inflation reached 10.1% over the same period, up from 9% a year earlier, and in Kyrgyzstan – 8%,” ADB noted.

According to the bank, inflation in Azerbaijan during the first five months of 2025 stood at 5.9%, reflecting the delayed effects of fuel and utility price increases.

ADB also revised its GDP growth forecast for the region. The bank now expects GDP to grow by 5.5% in 2025 (previous forecast – 5.4%) and 5.1% in 2026 (previous forecast – 5%).

“This reflects a stronger growth trajectory in Kazakhstan. Growth in other countries aligns with earlier expectations. Armenia’s economy slowed sharply, with growth dropping to 4.4% in January–April 2025 from 12.9% in the same period last year due to reduced industrial output. Economic growth in Azerbaijan decelerated to 1.5% in January–May 2025 compared to 4.2% a year earlier, due to a decline in hydrocarbon production,” the bank’s report emphasized.