CAREC Institute’s Quarterly Economic Monitor No. 17
The CAREC Institute has published its July 2025 Quarterly Economic Monitor. Main conclusion about the region’s economic performance in the first half of 2025: Robust growth, with potentially some cooling ahead as global uncertainty remains high.
Driven by services, partially by manufacturing, GDP growth further accelerated in most CAREC economies in the first quarter of 2025 from already strong growth of 2024. As indicated by retail sale figures, especially household consumption supported this growth, whereas industrial production results were more mixed, and divergent between countries, partially affected by ongoing volatility in mining. International financial institutions expect some slowdown in real GDP growth for most CAREC economies in 2025 and 2026, but average growth in the region—and for most individual economies—to remain above 4–5% year-on-year.
Inflation continued to accelerate in the majority of the CAREC economies to some extent, but not in all. In the second quarter of 2025, monetary policy was not further tightened even in countries where inflation rates increased; in some countries, monetary policy was eased. Growth in broad money supply slightly slowed but has remained generally high. Banks continued their strong expansion of loans to individuals. Despite USD weakness, several CAREC currencies slightly depreciated against the USD in 2025, others slightly appreciated. Adjusting for inflation, most CAREC currencies depreciated against the RUB and the EUR but appreciated against the RMB.
Exports of commodity exporters—other than gold—mostly contracted in the first half of 2025 due to lower export prices, exports of other economies continued to grow at various speeds. The CAREC economies’ import performance remains quite volatile and dependent on specific products and periods. However, in recent years, some countries have embarked more decisively on policies aimed at diversifying their economies and expanding industrial output, particularly in sectors like metallurgy, chemical products, textiles, and electronics, and thus trade within specific sectors has become more important. The 2nd China-Central Asia Summit, which took place in Astana, Kazakhstan, during 16–18 June 2025, will likely further enhance regional cooperation.
The CAREC region’s growth is currently solid; however, there might be even more potential in mining, and the region will need to continue to embrace technological change in support of economic growth, accelerated diversification, and decarbonization.