What to Expect from Central Asian Economies in 2024
The pandemic dealt a major blow to the global economy and to the economies of Central Asia in particular, which, despite some domestic production, rely on imports for a significant share (in monetary terms) of their consumption. The Russia-Ukraine war acted as an economic shock to these economies, which had yet to recover from the damage done by Covid. While there is considerable intra-regional potential in terms of manufacturing and trade, most of the imports into Central Asia come from China, Turkey and Europe. At the same time, transnational corporations in Russia account for almost half of Central Asian demand for consumer goods. In 2022, Central Asian countries began to reconfigure their supply chains to comply with sanctions. However, since almost half of the Russian economy was integrated with international corporations and supplied Central Asia, severing these trade links proved almost impossible. This is clearly reflected in the statistics for 2023, where almost all Central Asian countries saw re-exports of Western goods to Russia increase by tens or hundreds of times. In terms of information and statistics, the most open countries of the region are Kyrgyzstan and Kazakhstan. Uzbekistan is quickly catching up, with government agencies launching websites where a significant amount of data can be accessed, both about the economy and the country as a whole. Economic indicators for Central Asian countries in 2023 Countries (alphabetical order) GDP (in $ bln)* Growth, y-o-y Inflation, y-o-y Kazakhstan 237.00 5.1% 9.80% Kyrgyzstan 11.90 6.2% 7.30% Tajikistan 11.36 8.3% 3.80% Turkmenistan 60.10 6.3% 5.90% Uzbekistan 90.80 6.0% 8.77% * Approximations Excluding Kazakhstan, the region's largest economy (though still resource-based), whose GDP is larger than the other four countries’ combined, Central Asia can be characterized as a low-income region. With average wages in a range of $250–400 per month, the countries rely heavily on trade (imports) for food, clothing, and basic goods. No country in the region is fully self-sufficient in terms of producing consumer goods, which, given the complex logistics, poses a challenge during swings in markets or geopolitical instability. Still, the last five years have been favorable for the region: there have been fewer territorial disputes and border conflicts, while politicians in all five countries share the view that the C5 and C5+ formats can be an effective tool to develop intra-regional ties and a common market. Last year, the five presidents from the region met with the leaders of China, Russia and the United States. In 2023, the countries fully recovered from the pandemic downturn, and each economy grew in annual terms. Due to its high base ($200+ billion GDP), Kazakhstan turned in the lowest growth at 5.1%. Its economy is driven mainly by resource extraction, metallurgy and agriculture. Given its size – an area of 2.7 million square kilometers – logistics is a big challenge for doing business in the country. Last year, according to preliminary data, Kazakhstan produced 90 million tons of oil, with exports mostly heading to Russia’s Novorossiysk port through the Caspian Pipeline Consortium (CPC). Kazakh...
