The global economy is maintaining moderate growth rates and adapting to new trade barriers. The global business activity index (PMI) stood at 52.4 points in September. After falling in the second quarter, business confidence is recovering, but growth remains weak in developed economies due to high uncertainty. Emerging economies with large markets (India, Indonesia) are maintaining high levels of economic activity. Together with China, these countries continue to support global GDP growth.
The US is expected to grow by around 1.6% in 2026. High debt levels will hold back investment, but IT infrastructure construction will support economic activity. Growth in the eurozone will remain weak, at around 1.1%, mainly supported by increased government investment in defence and infrastructure. The Chinese economy will continue to grow at a rapid pace, with a forecast of 4.6% in 2026, aided by government stimulus of domestic demand. Inflation in the US and the eurozone will remain above target levels in 2026–2028. Rising costs amid tariff conflicts are limiting the pace of rate cuts in the US and may trigger an increase in ECB rates in 2026.
In 2025, the economy of the EDB’s region of operations will return to equilibrium after two years of record growth, with the region’s GDP growing by 1.9% after 4.5% in 2024. The slowdown is primarily due to Russia’s economic growth slowing to 1.0% in 2025 due to tight monetary conditions. Declining demand from Russia will slow Belarus’s GDP growth to 1.8%. Central Asia is expected to see high economic growth rates of around 6.6% in 2025, following 5.8% in 2024. In Kazakhstan and the Kyrgyz Republic, GDP growth in 2025 will rise to record levels since 2013: 5.9% and 10.3%, respectively. Uzbekistan is expected to see its highest growth in 14 years (excluding the post-COVID recovery) at 7.4%. Increased growth rates will continue in Armenia — 6.0%, and Tajikistan — 8.3%.
In 2026, the region’s economy will continue to grow steadily, at a rate of 2.3%. The economies of most countries in the region will continue to grow at a rapid pace in 2026 as a result of strong investment activity. We forecast GDP growth of 5.3% in Armenia in 2026, 5.5% in Kazakhstan, 9.3% in the Kyrgyz Republic, 8.1% in Tajikistan, and 6.8% in Uzbekistan. We expect Russia’s GDP growth to accelerate to 1.4% in 2026, with budget expenditures exceeding revenues. The Belarusian economy will grow at a rate close to the medium-term average of 1.8%.
Inflation at the end of 2025 is expected to be within the target range in Armenia — 3.3% YoY and Tajikistan — 3% YoY, and above the target in Belarus — 7.1%, Kazakhstan — 12.3% YoY, Kyrgyz Republic — 9.1% YoY, Russia — 6% YoY, and Uzbekistan — 7.5% YoY. The main factors are tariff increases and rising food prices on world markets.
Inflationary pressure in the region will continue to ease in 2026. We forecast inflation to move towards the target level in all countries of the region: a decline in inflation in 2026 in Armenia to 3.3% YoY, Belarus to 6.9% YoY, Kazakhstan to 9.7% YoY, the Kyrgyz Republic to 8.3% YoY, Russia to 5.5% YoY, and Uzbekistan to 6,7% YoY. In Tajikistan, inflation will remain within the target range of 4.5% YoY. Aggregate price growth in the region will slow to 6.3% YoY in 2026 from 6.9% YoY in 2025, barring any additional shocks.
