Economic Growth - The Times Of Central Asia

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Economic Growth

Kazakhstan Presents “Growth Case” to Global Investors in London

Kazakhstan is deepening its engagement with UK capital markets. At the Kazakhstan Capital Markets Day 2025 conference in London, Deputy Minister of National Economy Asan Darbayev outlined the country’s economic growth strategy and measures to enhance its investment climate. Speaking during the panel session “Sustainable Economic Growth and Financial Sector Development,” Darbayev highlighted that Kazakhstan’s real GDP grew by 6.3% in the first nine months of 2025, one of the strongest performances in recent years. The government’s medium-term target is to reach a GDP of $450 billion by 2029. Infrastructure development remains central to Kazakhstan’s strategy to position itself as a key transit and investment hub in Eurasia. Currently, five international rail corridors and eight road corridors are operational, including the strategically vital Middle Corridor. This infrastructure forms the backbone of Kazakhstan’s growing export and import routes and supports the localization of industrial production. Darbayev reaffirmed Kazakhstan’s standing as a reliable and creditworthy partner. The country maintains investment-grade ratings from S&P, Fitch, and Moody’s. Notably, S&P upgraded its outlook to “Positive,” while Moody’s raised Kazakhstan’s rating to Baa1 last year. To attract long-term investment, Kazakhstan offers a range of incentives, including investment contracts, tax and customs preferences, and legislative stability guarantees for up to 25 years. Investor engagement is facilitated through a digital investment platform operating on a “single window” principle, supported by the Investment Attraction Council. The council is tasked with removing administrative barriers and accelerating project approvals. A major draw for international capital is the Astana International Financial Centre (AIFC), which operates under English common law. The AIFC hosts more than 3,500 companies from over 80 countries, with cumulative investments exceeding $14 billion. The center’s emphasis on transparency and legal protections has made it a trusted destination for global investors. Kazakhstan continues to attract investment in oil and gas, engineering, transportation, and the food and beverage sectors. Major partners include Chevron, ExxonMobil, Shell, GE Transportation, Hyundai, KIA, Coca-Cola, Danone, Carlsberg, and Lactalis, reflecting interest in high value-added projects and technology localization. During the forum, Darbayev also held meetings with executives from Mitsubishi UFJ Financial Group (MUFG) and Morgan Stanley Investment Management (MSIM), further promoting Kazakhstan’s economic agenda to global financial leaders.

Economic Growth

Kazakhstan Presents Economic Growth Strategy in Washington

On October 15, Kazakhstan's Deputy Prime Minister Serik Zhumangarin presented the country’s new proactive economic growth strategy to leading American businesses during a roundtable hosted by the U.S.-Kazakhstan Business Council (USKZBC) at the U.S. Chamber of Commerce in Washington, D.C. The meeting served as a key platform for dialogue ahead of the annual meetings of the World Bank and the International Monetary Fund. The U.S. delegation included Khush Choksy, Senior Vice President for the Middle East, Turkey, and Central Asia at the U.S. Chamber of Commerce, along with executives from major corporations such as Chevron, ExxonMobil, Citi, Mastercard, Boeing, Bechtel, and LanzaJet. Zhumangarin highlighted the longstanding commercial ties between the two countries, noting that over 600 American companies currently operate in Kazakhstan, including General Electric, Pfizer, Honeywell, Coca-Cola, and John Deere. “Kazakhstan is an attractive country for American business. Our GDP this year will exceed $330 billion, approximately 60% of Central Asia’s total economy,” Zhumangarin stated, adding that GDP per capita at the end of 2024 surpassed $14,000, and $44,000 in terms of purchasing power parity. The government is aiming to raise total GDP to $450 billion by 2029. Zhumangarin emphasized that Kazakhstan’s financial indicators remain strong, with national debt at about 22.2% of GDP - around $61 billion - a level comparatively lower than in most global economies. Over the past two decades, the country has attracted more than $400 billion in foreign direct investment. According to Zhumangarin, less than one-third of that has gone into the raw materials sector, with the remainder directed to manufacturing, construction, transport, finance, and insurance. Kazakhstan has recorded steady economic growth exceeding 5% for three consecutive years - 5.1% in 2023, 5% in 2024, and 6.3% in the first nine months of 2025. International credit rating agencies S&P, Fitch, and Moody’s have maintained Kazakhstan’s investment-grade ratings, with S&P upgrading its outlook to “Positive” and Moody’s assigning a “Baa1” rating. Zhumangarin outlined a new economic strategy aimed at maintaining annual growth between 5% and 6%. Central to the plan is strengthening development finance institutions and launching large-scale projects in value-added sectors such as raw material processing, agriculture, and mechanical engineering. “The total investment potential of these sectors is estimated at over $100 billion,” he said. Priority industries include railway and automotive manufacturing, fertilizer production, waste processing, and the development of rare earth elements. Energy and municipal infrastructure are also major areas of focus, with projects worth $100 billion planned over the next five years. “We invite leading international companies with deep industry expertise. Their participation will boost production efficiency, generate employment, and reinforce Kazakhstan’s image as a reliable investment destination,” Zhumangarin added. The U.S. Chamber of Commerce, the world’s largest business association, represents over 3 million companies and 830 industry associations. The USKZBC comprises dozens of corporations active in Kazakhstan, including names such as Chevron, ExxonMobil, Fluor, Apple, GE, Bechtel, Boeing, and Mastercard. In 2024, trade between the U.S. and Kazakhstan reached $4.2 billion. More than 720 enterprises with American participation are registered in...

Economic Growth

Uzbekistan Emerges as One of Europe and Central Asia’s Fastest-Growing Economies

Uzbekistan is on track to be one of the five fastest-growing economies in the broader Europe and Central Asia region next year, according to the World Bank’s Europe and Central Asia Economic Update, Fall 2025. The report projects Uzbekistan’s gross domestic product will expand by about 6.2% in 2025 - well above the regional average amid an overall slowdown across emerging European and Central Asian markets. Overall regional GDP growth is expected to ease to roughly 2.4% in 2025, down from 3.7% in 2024, as weaker output in Russia drags on the aggregate. Central Asia as a whole continues to stand out. The World Bank notes that countries in the region are collectively growing around 5.9% - making it the fastest-growing part of Europe and Central Asia for the third straight year. Within that group, Tajikistan is also forecast to grow by 7%, Kyrgyzstan by 6.8%, and Kazakhstan by 5.5%. That performance keeps much of Central Asia well ahead of Europe’s advanced economies, which are expected to grow by just over 1% on average. Turkmenistan is excluded from the World Bank’s regional calculations because it does not publish internationally comparable economic data. For Uzbekistan, in particular, inclusion among the region’s top performers marks a sharp turnaround for a country that, less than a decade ago, was largely closed to global markets. By way of comparison, according to the World Bank, Uzbekistan’s economy is about eight times larger than Kyrgyzstan’s and roughly seven times larger than Tajikistan’s. In 2024, Uzbekistan’s gross domestic product was roughly $105 billion, compared with approximately $14 billion for Kyrgyzstan and $15 billion for Tajikistan. Remittances and Investment Fuel Expansion Rising income from abroad and expanding investment at home due to an increasingly investor-friendly climate are the twin engines of Uzbekistan’s boom. The World Bank attributes its upgraded forecast partly to stronger-than-expected remittances and higher capital spending. In the first half of 2025, remittances sent home by Uzbek workers - mainly from Russia, Turkey, and South Korea - jumped 27% year-on-year to reach around $8.2 billion, providing a surge in household consumption. At the same time, both public and private investment are climbing. Government spending on infrastructure and industrial projects remains high, and foreign capital is flowing in at record levels. According to Uzbekistan’s Ministry of Investment, Industry and Trade, foreign direct investment reached about $10 billion in 2024, the highest on record. Projects span energy, agriculture, and information technology, with investors from South Korea, China, the Gulf states, and Europe among the most active. The International Monetary Fund’s 2024 Article IV Consultation observed that “robust investment and resilient consumption” have kept growth well above the overall regional average. Reforms Since 2016 Have Laid the Groundwork This acceleration did not happen by chance. Since President Shavkat Mirziyoyev came to power in 2016, Uzbekistan has pursued a series of market-oriented reforms to dismantle decades of economic isolation and stagnation. The government unified the exchange rate, lifted currency restrictions, and simplified customs and tax rules. It began privatizing state...

Economic Growth

World Bank: Central Asia to Lead Regional Growth in 2025 Despite Global Slowdown

Economic growth in Europe and Central Asia (ECA) is slowing but remains resilient amid global and regional challenges, according to the World Bank’s latest Europe and Central Asia Economic Update: Jobs and Prosperity, released on October 7, 2025. The report projects GDP growth in the region at 2.4% in real terms this year, down from 3.7% in 2024. The slowdown is primarily attributed to weaker growth in Russia. However, excluding Russia, which accounts for about 40% of the region’s total economic output, growth is expected to hold steady at approximately 3.3% in both 2025 and 2026. “Developing economies in the region need bold reforms to turn resilience into stronger growth in productivity, output, and jobs,” said Antonella Bassani, World Bank Vice President for Europe and Central Asia. She stressed the importance of strengthening the private sector, improving education systems, and attracting more private investment to generate quality employment and address demographic changes. Central Asia remains the fastest-growing subregion for the third consecutive year, with growth expected to rise from 5.7% in 2024 to 5.9% in 2025. The World Bank attributes this momentum to increased oil production in Kazakhstan, higher remittance inflows, and rising public and private investment. Turkey and Poland are also highlighted for their strong performance, with forecast growth rates of 3.5% and 3.2%, respectively, supported by solid consumer demand and capital investment. Despite these positive signals, the World Bank warns that sluggish growth and weak reform momentum are exacerbating challenges in the labor market. While employment across the ECA region has expanded by 12% over the past 15 years, particularly in the services sector, many of the new jobs are low-skilled and offer limited income potential. Demographic shifts pose another challenge. The region’s working-age population is projected to shrink by 17 million in the coming decades, especially in Eastern and Central Europe and the Western Balkans. In contrast, Central Asia and Turkey are expected to see population growth, intensifying the need to generate sufficient employment opportunities. The report recommends that countries invest in infrastructure, education, and private-sector development to improve productivity. “Each country can tailor its approach to best use its assets, human talent, physical infrastructure, institutions, and natural resources,” said Ivailo Izvorski, World Bank Chief Economist for Europe and Central Asia. In Central Asia, economic growth is expected to be driven by expansion in agrifood and livestock processing, transport and logistics along Eurasian trade corridors, renewable energy investment, and tourism development. The World Bank notes that these sectors, supported by the region’s cultural and natural heritage, could help position Central Asia as one of the world’s most dynamic emerging markets.

Economic Growth

EBRD Projects Central Asia Economies 2025 Growth at 6.1%

The European Bank for Reconstruction and Development (EBRD) projects that the economies of Kazakhstan, the Kyrgyz Republic, Mongolia, Tajikistan, Turkmenistan, and Uzbekistan will grow by an average of 6.1% in 2025. According to the EBRD, the region’s momentum is being driven by strong industrial output, robust domestic demand, higher investment, rising wages, and continued remittance inflows. In 2026, growth is expected to remain positive but moderate to 5.2%. The report warns, however, that volatility in commodity prices, reliance on remittances, and dependence on Russian and Chinese markets pose ongoing risks to stability. Kazakhstan, Central Asia’s largest economy, is forecast to expand by 5.7% in 2025. Growth has been fueled by increased oil production at the Tengiz field, which boosted industrial activity and wholesale trade. The construction sector grew by 18.4% in the first half of the year, reflecting large infrastructure projects and residential development. Even so, the EBRD cautions that over-reliance on Russian transit routes and global commodity fluctuations could slow growth to 4.5% in 2026. The Kyrgyz Republic is projected to remain one of the region’s fastest-growing economies, with GDP expected to rise by 9.0% in 2025. The economy expanded by 11.4% in the first half of the year, supported by strong public investment, remittance inflows, and rising wages. Manufacturing, trade, and construction are key drivers, while tourism is growing through new investments. Growth is forecast to ease to 6.0% in 2026 but is expected to remain resilient unless remittance flows decline. Mongolia’s economy is expected to grow by 5.8% in 2025. A 35.6% rebound in agriculture after two difficult years helped offset slower mining activity and weaker coal prices, while copper production increased. Tajikistan’s economy grew by 8.1% in the first half of 2025, driven by trade, agriculture, transport, and a doubling of mining output. Remittances rose by 64%, and sharp wage growth boosted household consumption. The EBRD forecasts GDP growth of 7.5% in 2025, moderating to 5.7% in 2026. Continued support from international institutions such as the World Bank and IMF is expected to sustain growth, although reliance on remittances remains a structural vulnerability. Turkmenistan is projected to grow by 6.3% in both 2025 and 2026, supported by trade, transport, services, and construction. Official data show capital investment up 15.6% year on year. Uzbekistan’s economy is expected to expand by 6.7% in 2025, backed by strong domestic demand, rising wages, and a 28.7% increase in remittances. Services grew by more than 8%, while industrial output was buoyed by high gold prices and stronger manufacturing in food and metals. Growth is projected to ease slightly to 6.0% in 2026 but will remain supported by diversified manufacturing and stable foreign investment.

Inflation

Experts Say Kazakhstan Must Boost Manufacturing to Tame Inflation

Inflation is steadily eroding incomes in Kazakhstan, depleting savings and undermining government efforts in the social sector. The Times of Central Asia previously noted that surging economic growth could be a contributing factor to Kazakhstan’s inflation problem. But despite rising prices, the government has no plans to apply the brakes. On the contrary, officials point to promising GDP growth driven by sectors beyond oil. Meanwhile, independent experts argue that only large-scale industrial development can provide a lasting solution to inflation. Persistent Price Pressures Inflation continues to outpace official projections. In August, annual inflation hit 12.2%, and by the end of 2025 it is expected to reach 14%, well above the National Bank of Kazakhstan’s target range of 5-6%. Economists say the country’s dependence on imports is a key driver. Kazakhstan imports large volumes of food, fuel, medicine, equipment, and consumer goods. Wage and pension increases are failing to keep pace with the surge in prices. President Kassym-Jomart Tokayev has acknowledged that high inflation poses a serious challenge, warning it is “eating away at economic growth and household incomes.” Government efforts to stabilize prices have yet to show meaningful results. On September 23, Minister of Trade and Integration Arman Shakkaliev announced that Kazakhstan will gradually phase out price controls on socially significant food products (SZPT) in favor of targeted digital support for consumers. The SZPT list currently includes 19 essential items. At the same time, Prime Minister Olzhas Bektenov instructed agencies to crack down on unjustified price hikes for basic goods, ordering strict enforcement of available price control tools. Growth at a Cost Inflation, according to Deputy Prime Minister and Minister of National Economy Serik Zhumangarin, is being fueled by economic expansion. He warned that efforts to restrain inflation could hinder growth. “Since 2023, GDP has grown by 5%, and in 2024 we grew without the contribution of oil. This year is a turning point. From 2026, oil will no longer influence GDP growth,” Zhumangarin said. Although Kazakhstan’s economy has long relied on oil revenues, the minister believes this trend is now shifting. “Economic growth is always accompanied by high inflation,” he said. “More than $12 billion in investments have already been attracted, and the target for the year is $24 billion. The government will soon announce a new strategy for economic growth. We must follow the path of Asian countries but with modern technologies.” Call for Industrialization Independent analysts argue that real progress against inflation requires mass domestic production across a wide range of goods. Political analyst Gaziz Abishev stressed the urgency of moving beyond megaprojects toward practical, infrastructure-linked industry. “Kazakhstan needs real production, not fairy-tale megaprojects. Industry tied to infrastructure, logistics, human resources, and markets solves many issues,” he wrote. “It creates well-paid jobs, stimulates small and medium-sized businesses, reduces reliance on imports, supports the tenge, and addresses budget deficits.” Abishev also called for openness to foreign industrial investment, regardless of origin. His comments appear to push back against public concerns over the influence of Russia, China, and Western...