Central Asia’s growth still has one engine

The World Bank’s April 2026 regional update puts growth in Europe and Central Asia at 2.1 per cent this year, down from 2.6 per cent in 2025. Within that, Central Asia is the strongest sub-region at an average 4.9 per cent across 2026 and 2027. The interesting part is the reason given for both. The Bank’s June Global Economic Prospects kept the 2.1 per cent forecast but put 2025 at 2.5 per cent, an ordinary revision to an estimate rather than a change of view.

The numbers

• Europe and Central Asia: 2.1 per cent in 2026, down from 2.6 per cent in 2025 (April) or 2.5 per cent (June estimate).
• Central Asia: 4.9 per cent average across 2026–27, as Kazakh oil production stabilises.
• Kazakhstan: 4.6 per cent in 2026 and 3.9 per cent in 2027, after 6.5 per cent in 2025.
• Russia: 0.8 per cent in 2026, after 1.0 per cent in 2025.
• Ukraine: 1.2 per cent.
• Central Europe: around 2.4 per cent. Western Balkans: around 3.1 per cent over two years.

Reading the Central Asian figure

Nearly five per cent is a strong number and it is being carried by a narrow base. The Bank attributes the sub-regional forecast to Kazakh oil production stabilising, that is, to a level rather than a further increase. Growth that rests on output reaching a plateau is growth with a visible ceiling. The Kazakh line in the June tables shows it: 6.5 per cent last year, 4.6 this year, 3.9 next.

The second support is labour income. In the June report the Bank says remittances surged after Russia’s invasion of Ukraine, supported consumption especially in Central Asia, and are now expected to stabilise as Russian growth weakens. At 0.8 per cent, Russia is not generating the labour demand that produced the surge.

Both supports are therefore flattening in the same forecast period. Neither is contracting, which is why the headline number stays high. But a plateau plus a plateau is not a growth model, and nothing in the forecast identifies what follows them.

The oil plateau depends on one pipeline

A plateau at least sounds safe. July showed that it is not. After drone strikes on tankers at the Caspian Pipeline Consortium’s Black Sea terminal, CPC stopped accepting Kazakh crude on 21 July once its storage was full. The Times of Central Asia reported that Kazakh oil and condensate output fell by about 21 per cent on 22 July, from 2.07 million to 1.63 million barrels a day, and that Tengiz dropped from an average of 925,000 barrels a day to roughly 406,000. The route carries more than 80 per cent of Kazakhstan’s oil exports. Loading resumed on 27 July, according to the Energy Ministry.

A week-long stoppage will not change the annual growth rate much. The point is structural. The Bank’s central Central Asian assumption is a stable volume of Kazakh oil, and that volume leaves the country almost entirely through a terminal on the coast of a state at war. The same June report notes that higher oil prices after the conflict in the Middle East should lift export revenue in Kazakhstan, Azerbaijan and Turkmenistan. That is a price effect, and it helps the budget. It does not add barrels, and it does not diversify the route.

Remittances are already softening at the source

The labour-income channel is weakening faster than a word like “stabilise” suggests. Russian border-agency figures reviewed by Vedomosti and reported by Kursiv show about 1.9 million citizens of Uzbekistan, Tajikistan and Kyrgyzstan entering Russia for work in the first half of 2026, down 15 per cent from 2.3 million a year earlier. Arrivals fell 13.2 per cent from Uzbekistan, 17.9 per cent from Tajikistan and 16.7 per cent from Kyrgyzstan. The reported causes are stricter enforcement, dearer work permits and higher living costs.

Money follows people with a lag, and Kyrgyzstan’s central-bank data already show it. Remittances in January–May 2026 came to $1.247 billion, 8.8 per cent less than a year earlier. The portion from Russia, 88.3 per cent of the total, fell by 14.1 per cent. Transfers from countries outside the former Soviet Union rose 55.8 per cent, to $105.8 million. That is diversification, but at roughly a tenth of the Russian flow it cannot yet replace what is being lost.

Where a second engine might be running

The strongest objection to this reading is Uzbekistan. The Bank forecasts 6.4 per cent growth there in 2026 and 6.7 per cent in 2027, well above Kazakhstan, and Uzbek growth does not rest on oil. The EBRD, in its June outlook, is more optimistic about the region as a whole: 5.6 per cent in 2026 and 5.3 per cent in 2027, driven by domestic consumption, investment and services. The two institutions are not measuring the same thing. The EBRD’s group includes Mongolia and Turkmenistan, and the Bank currently publishes no projections for Turkmenistan pending better data.

The objection is real but partial. The EBRD itself credits rising remittances and wage growth for Uzbekistan’s services expansion, and names remittances from Russia as the base of Tajik household incomes. Part of the candidate second engine is fuelled by the first. Kyrgyzstan’s growth, at 11.1 per cent last year in the Bank’s estimate, falls to 6.1 per cent in 2026 on the same forecast. The evidence of an independent engine would be non-commodity exports rising while remittances fall. That is not yet visible in the data cited here.

What is missing from the outlook

The April update does not break out the South Caucasus separately. The June tables give the country figures: Armenia slowing from 7.1 to 5.3 per cent, Georgia from 7.5 to 5.0 per cent, and Azerbaijan edging up from 1.4 to 2.0 per cent. Armenia and Georgia have had their own post-2022 income effects, driven by relocation and re-export flows that behave differently from labour remittances, and they deserve their own treatment rather than inference from Central Asian averages.

What to watch

Four series will show whether the plateau holds. The first is CPC throughput and Kazakh crude output against the plan, since the forecast now depends on a single export route. The second is monthly remittance inflows to Kyrgyzstan, Tajikistan and Uzbekistan, with the share from Russia shown separately. The third is migrant arrivals in Russia in the second half. The fourth is non-oil export growth in Kazakhstan and Uzbekistan. The fourth is the one that would indicate a second engine. It is also the one that has moved least.

Sources

• World Bank — “Economic Growth to Slow in Europe and Central Asia as Risks Rise”, press release, 8 April 2026
• World Bank — Europe and Central Asia Economic Update, April 2026
• World Bank — Global Economic Prospects, Europe and Central Asia regional highlights, June 2026
• EBRD — “Central Asia and Mongolia to see highest economic growth in the EBRD regions”, 3 June 2026
• Times of Central Asia — “Kazakhstan Oil Output Falls 21% as CPC Halt More Than Halves Tengiz Production”, July 2026
• The Astana Times — “Kazakhstan Resumes CPC Oil Exports as Marine Terminal Reopens”, 27 July 2026
• Kursiv — “Russia records 15% drop in Central Asian migrant worker arrivals”, 6 August 2026
• Akchabar — “$1.25 billion was transferred to Kyrgyzstan from abroad — $120 million less than a year ago”, 4 August 2026