CAREC Institute’s Quarterly Economic Monitor No. 18

The CAREC Institute has published its latest Quarterly Economic Monitor.  Main conclusion about the region’s economic performance in the first nine months of 2025: Solid economic performance with possible cooling ahead amid continued high global uncertainty.

During the first nine months of 2025, the CAREC region demonstrated stable and high economic growth rates, exceeding the 2024 average. GDP growth was mainly driven by the industrial sector, which was supported by a strong services sector and a recovery in the agricultural sector. This economic growth is becoming increasingly broad-based, reflecting a positive trend toward industrial diversification that will enable the CAREC region to overcome its dependence on raw materials in the future. However, in some cases, rapid economic growth was driven by strong domestic demand and fiscal stimulus, which added to inflationary pressures and led to an acceleration in consumer price inflation, which reached 6.0% in September 2025. This forced central banks to conduct a cautious monetary policy.

This trend is occurring against a backdrop of high uncertainty and volatility in commodity markets. At the same time, demand from the People’s Republic of China remains an important factor, reflecting its role as the main trading partner for most countries in the region. Ongoing strong global structural transformations, such as changes in global supply chains and nearshoring, provide the CAREC region with an opportunity to position itself as an emerging alternative manufacturing and logistics corridor. This trend is supported by significant growth in construction and investment in the region, particularly in infrastructure, which contributes to the increase in intra-regional trade and development of transportation links.

Looking ahead, the projected moderation in GDP growth from 5.8% in 2024 to 5.3% in 2025 and 4.6% in 2026 reflects the region’s vulnerability to weakening of external demand from key partners, volatility in global commodity prices, and tightening of global financial conditions. Against the backdrop of global structural trends, such as changes in international trade rules and the reorientation of trade flows, the CAREC region is undergoing a structural transformation of its economies, which opens opportunities for long-term sustainable economic growth.