EME Macro/Strategy: Central Asia and the Caucasus – USD 1,000bn GDP by 2030!

In this report, we update our views and forecasts for Georgia, Kazakhstan and Uzbekistan, and extend our forecasts out to 2026E. Real GDP growth should be resilient in the region, with Georgia, most likely, reporting the fastest expansion, at 8.5%, this year, on our estimates. Uzbekistan has been broadly in line with our expectations, with this year’s growth estimated at 6.5% in our forecasts; followed by Kazakhstan, for which we expect growth at 4.0%, despite a negative 1H24. The monetary easing cycle should pick up again next year, as inflation in Kazakhstan and Uzbekistan moves closer to the CB targets in the form of 250bps and 200bps of cuts, respectively. Even considering these cuts, we expect all three countries to keep a comfortable positive ex-post real rate environment. In this publication, we look at how the region fares in our sample of EM and frontier markets (including EMEA countries beyond WOOD’s coverage) and we also look at the convergence story, out to 2030E. The Central Asia and Caucasus region, in terms of GDP, is set to breach USD 1trn of GDP, from 2023’s USD 595bn (this outstanding growth should be conductive for an improvement in living standards, especially in Uzbekistan), which should pave the way for it to become increasingly relevant, as its size moves closer to Eastern Europe.