Economic Growth - The Times Of Central Asia

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EBRD Invests Record €2.26 Billion in Central Asia in 2024

The European Bank for Reconstruction and Development (EBRD) reached a record level of investment in Central Asia in 2024, contributing €2.26 billion to 121 projects across six countries in the region. This was nearly double the amount invested in 2023. Additionally, the EBRD attracted €784 million from co-financiers, bringing the total investment in the region’s economy to over €3 billion. Uzbekistan and Kazakhstan Lead in Funding Uzbekistan and Kazakhstan were the largest recipients of EBRD funding, securing €938 million and €913 million, respectively. These two nations ranked as the fifth and sixth largest destinations for EBRD investments globally in 2024. Other countries in the immediate region also benefited from significant funding, with Mongolia receiving €264 million, Tajikistan €88 million, and the Kyrgyz Republic €52 million. Focus on Sustainable Infrastructure and Green Economy The majority of EBRD investments in Central Asia supported sustainable infrastructure projects, accounting for 61% of the total. Another 24% was channeled to local banks to assist small businesses, women entrepreneurs, and youth-focused initiatives, as well as projects promoting climate resilience and resource efficiency. The remaining 15% was allocated to private-sector companies. In alignment with the Paris Agreement, 58% of EBRD investments in the region went to projects promoting a green economy. Milestones in 2024 The EBRD achieved several notable milestones in 2024: Total investments in Kazakhstan surpassed €10 billion. Uzbekistan reached €5 billion in cumulative EBRD funding. Both Tajikistan and the Kyrgyz Republic exceeded €1 billion in total investments since the EBRD began operations in the region 30 years ago. Landmark Projects The EBRD financed several groundbreaking projects in Central Asia during 2024, including: Uzbekistan: €59 million for a renewable hydrogen facility aimed at decarbonizing the fertilizer sector. Kazakhstan: €96.4 million for a new wastewater treatment plant in Aktobe, the largest municipal project supported by the EBRD in the region. Mongolia: €11.3 million to support the first green bond issued by a local bank. Investments in Energy Infrastructure Significant funding was also allocated to improving electricity grids across the region: In Kazakhstan, €252 million was used to construct 600 km of transmission lines. In Uzbekistan, €60.3 million supported the development of a 230 km transmission line in the Navoi region. In the Kyrgyz Republic, €14 million upgraded power infrastructure in Osh and Issyk-Kul. In Tajikistan, €31 million was allocated to improve a transformer in the Sugd region. Investments in Health and Transportation The EBRD also provided substantial funding for healthcare and infrastructure projects: Kazakhstan: €365 million for a hospital project. Uzbekistan: €216 million for a road and bridge project in the Khorezm region. Mongolia: €39.2 million for a hospital in Darkhan. Support for Small Businesses The EBRD continued its efforts to empower small businesses in Central Asia, providing advisory services to more than 450 small and medium-sized enterprises (SMEs). Over 8,000 SMEs benefited from training and mentoring programs. In Tajikistan, the EBRD launched its Star Venture initiative, allocating €28 million to 25 high-growth companies through agreements with local banks. The EBRD’s Legacy in Central Asia As the...

Rail Corridor Railways Western Europe-Western China. Eurasian Transport Network International transport Economic Growth

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.

GDP Economic Growth Economy Investments

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.

Economy economic new driver for Uzbekistan's economy Economic Growth Social Services World Bank

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

Economic Growth Economy 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.