Economic Growth - The Times Of Central Asia

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Kazakhstan-China Railway Cargo Transportation Reaches Record High in 2024

In 2024, railway cargo transportation between Kazakhstan and China exceeded 32 million tons, achieving an all-time high, according to the Kazakh Ministry of Transport. Kazakhstan’s rail exports to China grew by 1 million tons, totaling 13.7 million tons. Key export commodities included iron and non-ferrous ore, ferrous and non-ferrous metals, and grain. Meanwhile, Chinese transit cargo passing through Kazakhstan increased by 19%, reaching 15.3 million tons. Additionally, containerized Chinese cargo transiting to Europe via the Trans-Caspian International Transport Route (TITR) recorded significant growth, rising by 43% compared to 2023. One of the main drivers of this record-breaking performance was the opening of a Kazakh terminal at the dry port in Xi’an, China. In 2024, more than 300 container trains passed through this terminal and the Kazakh Caspian port of Aktau, an astonishing thirtyfold increase from 2023. Kazakhstan Temir Zholy (KTZ), the country’s national railway company, has expanded its terminal network. Currently, Kazakhstan operates five major terminals: The port of Lianyungang (China), The dry port in Xi’an (China), Dostyk railway station (Kazakhstan), The Khorgos Gateway dry port (Kazakhstan), and The ferry complex at the Caspian port of Kuryk (Kazakhstan). Kazakhstan has announced plans to add nine additional terminals over the next two years, reinforcing Kazakhstan’s position as a vital hub for transcontinental trade. Several terminal construction projects began in 2024, including: Almaty, Kazakhstan: A logistics hub aimed at strengthening domestic cargo-handling capacity. Azerbaijani port of Alat: A joint project involving Kazakhstan, Azerbaijan, and China to establish a cargo terminal in Baku. Budapest, Hungary: A terminal in Hungary’s capital designed to expand Kazakhstan’s trade network in Europe. Selyatino, Russia: A facility near Moscow to support rail cargo transportation between Kazakhstan, Russia, and China. Additionally, and in collaboration with China’s port of Lianyungang, Kazakhstan has begun constructing a container hub at the Caspian port of Aktau. Kazakhstan’s expanding railway infrastructure will solidify its role as a key logistics hub connecting China, Central Asia, and Europe. With continued investment in terminal networks and partnerships with regional and global stakeholders, Kazakhstan is well-positioned to further enhance its trade capacity and meet the growing demand for transcontinental cargo transportation.

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Uzbekistan’s Economy Grows 6.5%, Investments Reach $34.9 Billion in 2024

In 2024, Uzbekistan’s gross domestic product (GDP) grew by 6.5%, reaching $115 billion, according to Presidential Spokesperson Sherzod Asadov. The announcement was made during a presidential conference focused on investment and economic performance. Foreign investments surged by 1.6 times, totaling $34.9 billion, and 242 large and medium-sized projects worth $10 billion were launched. For the first time, the country’s exports reached $27 billion. According to the official report, the mining, oil and gas, chemical, and agriculture sectors exceeded their investment targets, achieving more than double their expected performance. This highlights the robust growth and prioritization of these key industries. Despite these achievements, challenges persist in several sectors: Textile Industry: Missed its investment target by $17 million. Uztransgaz and Uzmetkombinat: Investments dropped by half. Uzsuvtaminot: Experienced a 20% decrease in investments. Officials from these organizations have been issued strict warnings to improve their performance by the first quarter of 2025 or face further consequences. Additionally, several ministries underperformed in implementing grant plans: Ministries of Ecology, Agriculture, State Assets, Pharmaceuticals, and Forestry: Delivered less than 25% of their grant targets. Ministries of Construction, Transport, Culture, and Tourism: Secured less than $10 million in grants. Ministries responsible for Preschool and School Education, Health, Transport, Sports, Higher Education, Culture, Ecology, Agriculture, Digital Technologies, and Construction were criticized for failing to attract sufficient investments and grants, despite having significant opportunities to do so. The report also highlighted underwhelming investment figures from high-potential countries such as France, Japan, Italy, Hungary, Malaysia, and Spain, which collectively invested less than $100 million in Uzbekistan in 2024. This indicates untapped opportunities for economic partnerships and collaborative growth. As previously reported by The Times of Central Asia, Uzbekistan’s President Shavkat Mirziyoyev has outlined transformative plans to modernize state-owned railway and aviation sectors as part of the country’s long-term development strategy. These reforms aim to increase Uzbekistan’s GDP to $200 billion by 2030, setting an ambitious target for sustained economic growth.

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World Bank Urges Reforms to Unlock Uzbekistan’s Service Sector Potential

The World Bank has published a report analyzing Uzbekistan’s service sector, underscoring its critical role in driving economic growth and creating jobs. In 2023, the service sector accounted for 43.9% of the country’s GDP, solidifying its position as the main pillar of the Uzbek economy, ahead of industry, agriculture, and construction. The sector has also become a key source of employment, compensating for the long-term decline in agricultural jobs since independence. Since 2017, Uzbekistan has implemented market reforms that have spurred sustainable economic growth, averaging 5.5% annually. In 2023, the service sector alone contributed to a 6.3% rise in GDP. However, structural transformation has lagged, with the sector’s share of GDP increasing only modestly - from 41% in 2010 to 44% in 2022. The report highlights challenges such as a concentration of low-skilled jobs in retail, hospitality, and transport, while high-productivity and innovation-driven services, such as ICT and professional services, remain underdeveloped, comprising just 4% of service-sector employment. To unlock the sector’s full potential, the World Bank report identifies three key priorities -connectivity, contestability, and capabilities (3Cs). Improving physical and digital infrastructure is critical, as Uzbekistan ranks 88th globally on logistics performance indicators. While 4G/LTE coverage is expanding, it has yet to achieve universal accessibility. Additionally, market liberalization is essential, as restrictions on cross-border services and state monopolies in sectors like telecommunications hinder competition and innovation. The World Bank recommends a range of reforms, including investing in infrastructure, liberalizing markets, easing data localization requirements, and expanding professional education programs such as One Million Uzbek Coders. These initiatives, combined with Uzbekistan’s anticipated accession to the World Trade Organization (WTO), could significantly boost the economy. The report projects that these reforms could increase GDP by 17%, stimulate growth in the financial, communications, and insurance sectors, and support the development of small and medium-sized industries. Market liberalization, in particular, promises substantial economic benefits, including higher wages and enhanced global competitiveness. By addressing these challenges, Uzbekistan can position its service sector as a key driver of sustainable growth and long-term prosperity.

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EDB Forecasts 8.4% GDP Growth for Tajikistan in 2025

Tajikistan’s real GDP is projected to grow by 8.4% in 2025, driven by favorable trade and investment dynamics, rising gold export prices, and decreasing energy import costs, according to the Eurasian Development Bank (EDB). This optimistic forecast surpasses the Tajik government’s minimum expectation of 8.0% growth. The EDB predicts that inflation will rise to 5.9% in 2025, returning to the National Bank of Tajikistan’s (NBT) target range of 6.0% (+/- 2 percentage points) by the end of the year. Analysts attribute this inflationary uptick to strong domestic demand. In 2024, Tajikistan recorded a historic low inflation rate of 3.6% - the lowest since the country’s independence. However, a slight increase in the refinancing rate, by 1 percentage point, is expected as inflation adjusts back to the target range. The refinancing rate has remained at 9.0% since August 5, 2024. The EDB also forecasts a slight devaluation of the somoni, Tajikistan’s national currency, with the exchange rate expected to reach 11 somoni per US dollar by the end of 2025. This adjustment is attributed to higher imports and a decline in remittance volumes. Currently, the somoni trades at 10.9450 per dollar, reflecting a 0.2% appreciation against the dollar in 2024, according to data from the National Bank for Reconstruction and Development. The Times of Central Asia previously highlighted the main short-term risks for Tajikistan’s economy from 2024 to 2026, but the EDB’s projections signal a positive outlook for 2025. Key growth drivers, such as trade, investment, and favorable market conditions, are expected to bolster economic performance despite currency pressures. Despite the fact that the Government of Tajikistan claims the poverty level in the country has decreased (the poverty threshold is not specified), in reality a huge swathe of the male population is working abroad in an attempt to feed their families. Up to 40% of households in Tajikistan have at least one member working abroad. According to the World Bank-KNOMAD, migrants’ remittances to Tajikistan in 2022 amounted to 5.346 billion dollars (39.6% of the country’s GDP). This makes Tajikistan one of the most remittance-based economies in the world. This story was last updated on 10 January 2025 at 10:23GMT

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Central Asia Poised to Outpace Global Growth in 2025, IMF Projects (With One Exception)

The year 2025 is anticipated to bring moderate growth for the global economy, according to forecasts by the International Monetary Fund (IMF). Global GDP is projected to grow by 3.2%, reaching $115.3 trillion at current prices. While global growth is expected to remain stable, it is weaker than initially forecast. The IMF notes that the economic outlook for the United States has improved, but growth expectations for other advanced economies, particularly in Europe, have been downgraded. Emerging markets and developing economies continue to grapple with a range of challenges, including production disruptions, shipping delays, geopolitical conflicts, civil unrest, and extreme weather events. These factors have tempered growth prospects in regions such as the Middle East, Central Asia, and sub-Saharan Africa. In contrast, emerging Asia is experiencing robust growth, fueled by strong demand for semiconductors and electronics, underpinned by substantial investments in artificial intelligence. Additionally, public investment in China and India is driving regional economic expansion. However, the IMF forecasts that global growth will average 3.1% annually over the next five years, a pace slower than pre-pandemic levels. Global Economic Highlights In 2025, the United States is expected to retain its position as the world’s largest economy, with a GDP of $30.3 trillion at current prices. China will follow with $19.5 trillion, while Germany is projected to rank third at $4.9 trillion. Japan and India will occupy fourth and fifth places, with GDPs of $4.4 trillion and $4.3 trillion, respectively. Central Asia Outlook In Central Asia, Uzbekistan’s economy is forecast to expand by 5.7%, reaching $127.4 billion at current prices, according to the IMF. This growth rate positions Uzbekistan as one of the region’s fastest-growing economies. Kazakhstan, the largest economy in Central Asia, is expected to achieve 4.6% growth, with GDP reaching $306.6 billion. Kyrgyzstan’s GDP is forecast to grow by 5%, reaching $17.3 billion at current prices. Tajikistan’s economy is expected to grow by 4.5%, with GDP projected at $14.1 billion. Turkmenistan is forecast to experience slower growth, with its GDP increasing by 2.3% to reach $91.1 billion.

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Rahmon Unveils Tajikistan’s Roadmap for Economic Growth and Diplomacy

On December 28, Tajikistan’s President Emomali Rahmon delivered his annual address, titled “On Major Dimensions of Tajikistan’s Domestic and Foreign Policy,” during a joint session of both chambers of the Tajik Parliament. The president outlined key priorities for implementing domestic and foreign policy and advancing various sectors of Tajikistan's economy, including industry, energy, agriculture, transport, investment, entrepreneurship, education, science, healthcare, and social protection. Rahmon directed the government to draft a "Medium-Term Development Program for 2026-2030" by the end of 2025. Highlighting the need for innovation, he proposed declaring 2025-2030 the “Years of Development of the Digital Economy and Innovation.” Additionally, he announced plans to establish a University of Innovation and Digital Technologies in Kulob, building upon the existing Institute of Technology and Innovation Management. Rahmon noted significant progress in industrialization, with Tajikistan’s industrial production nearly doubling in the past five years. This growth included the creation of more than 2,040 industrial enterprises and 74,000 jobs. In the road and transport sector, Rahmon underscored the importance of transforming Tajikistan into a transit hub. Ongoing modernization and reconstruction efforts have already improved the country’s ranking in the World Economic Forum’s road quality index, rising from 50th to 44th among 165 countries. Rahmon highlighted that 43% of Tajikistan's 2024 state budget is allocated to the social sector. Over the past five years, public-sector wages have increased four times, doubling overall during this period. He instructed the government to further raise salaries for employees in education, healthcare, social protection, culture, sports, government agencies, law enforcement, and the military. Employment remains a strategic priority. Rahmon noted that 4.1 million jobs have been created since independence, and he directed regional and local authorities to generate an additional 1.4 million jobs across all sectors of the economy in the next five years. On foreign policy, Rahmon reiterated Tajikistan’s commitment to its “open doors” approach, expressing readiness to strengthen bilateral and multilateral relations. He emphasized the importance of constructive engagement with international and regional organizations, including the United Nations, international financial institutions, and development partners. Rahmon’s address outlined a comprehensive roadmap for Tajikistan’s development, combining innovation, infrastructure, and social investment with an open and cooperative foreign policy. His directives reflect a vision aimed at fostering economic growth, improving living standards, and enhancing the country's position on the global stage.