Economic Growth - The Times Of Central Asia

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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

Economy Economic Growth GDP Growth Forecasts IMF

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.

Economy Strategy Government Economic Growth Socio-Economic Development

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.

Export/Import Trade Economic Growth CIS International trade Foreign trade turnover

Uzbekistan’s Foreign Trade Turnover Reaches $59.4 Billion in 2024

From January to November 2024, Uzbekistan’s foreign trade turnover (FTT) reached $59.4 billion, marking an increase of $2.1 billion or 3.6% compared to the same period in 2023, according to the Uzbek Statistical Agency. The volume of exports rose to $24.2 billion, a 4.4% increase compared to January-November 2023. Imports totaled $35.1 billion, growing by 3.0% over the same period. Kazakhstan emerged as one of Uzbekistan’s largest economic partners, following China and Russia. Factors contributing to this include a shared border, trade liberalization, and economic collaboration within the CIS free trade zone. Uzbekistan currently conducts trade with 195 countries, with significant FTT shares attributed to: China: 19.0% Russia: 18.0% Kazakhstan: 6.5% Turkey: 4.4% South Korea: 3.0% The Commonwealth of Independent States (CIS) countries accounted for 35.4% of Uzbekistan’s FTT during this period, reflecting a 3.0% increase from 2023. The growing economies of Uzbekistan’s trading partners in the CIS suggest a potential for increased demand for Uzbek exports. However, trade with non-CIS countries saw a decline. Uzbekistan’s trade share with other foreign nations dropped by 3.0% compared to the same period in 2023, comprising 64.6% of the total FTT.

International investment Economic Growth Foreign Investment Government

Uzbekistan Targets $43 Billion in Investments to Accelerate Growth

On December 19, Uzbek President Shavkat Mirziyoyev chaired a government meeting to review foreign investment progress in 2024 and outline goals for 2025. Since 2017, Uzbekistan has attracted a total of $188 billion in investments, including $87 billion in foreign investments. This has increased the share of investments in the country’s GDP to over 30%, providing a solid foundation for sustainable economic growth. In 2024, the volume of investments grew by 1.3 times, surpassing $36 billion. These funds financed 560 large and medium-sized projects, many of which have already been put into operation this year. These projects are expected to boost Uzbekistan’s exports by $1 billion in 2025. For 2025, Uzbekistan aims to utilize $43 billion in investments, funding over 300 large projects. These initiatives will support the production of 662 types of import-substituting goods, further strengthening the country’s industrial base. Mirziyoyev underscored the importance of targeted engagement with foreign investors and improving conditions to attract more investment. The meeting also set an ambitious goal to double Uzbekistan’s annual export volume by 2030, reaching $45 billion. Achieving this target will require launching new investment projects, increasing the production of high-added-value goods, and expanding access to international markets.