Economy growth - The Times Of Central Asia

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Foreign direct investment (FDI)

How Almaty and Astana Built Central Asia’s Deepest Business Ecosystem

Every region has cities that pull people and money toward them. New York, London, Dubai, and Singapore became places where ambitious people went to make careers, companies went to find talent, and investors went to put money to work. Once that concentration takes hold, it feeds on itself. More companies create more jobs, more talent attracts more companies, and banks, lawyers, consultants, airlines, schools and restaurants grow around them. Central Asia has developed its own version of that gravitational pull. Almaty has long been the region’s main commercial center and was Kazakhstan’s capital until 1997. It remains effectively tethered to Astana by intense passenger traffic and the constant movement of businesspeople, officials and professionals between the two cities. Astana has grown around government, international finance, technology and diplomacy. Together, they function as a two-city economic and political engine. The numbers explain much of this. The Times of Central Asia’s Central Asia Balance Sheet puts Kazakhstan at $306.2 billion of the five Central Asian economies combined $543.4 billion in GDP, or 56.4%. Its share of accumulated foreign investment is even larger. The Balance Sheet puts Central Asia’s inward foreign direct investment (FDI) stock at $235.6 billion at the end of 2025, of which Kazakhstan held $156.4 billion, or 66.4%. FDI stock represents capital accumulated over years rather than announced agreements or one unusually strong year of inflows. Almaty and Astana Play Different Roles Almaty accounted for 22.7% of Kazakhstan’s GDP in 2025 and Astana another 12.3%, putting their economies at roughly $69 billion and $38 billion respectively. Together they produced around $107 billion. Almaty is Kazakhstan’s main business and financial center. Kazakhstan’s largest banks, investment firms, multinational offices, lawyers, accountants and consultants are concentrated there. The Globalization and World Cities research network (GaWC) placed Almaty in its Gamma+ group in 2024, alongside Austin, Antwerp, and Kuwait City. GaWC bases the classification on the networks of major international business-service firms, offering a measure of how closely a city is connected to the global corporate economy. Consistent with that ranking, multinational companies have also chosen Almaty as a base for regional operations. Mars runs its eleven-country regional headquarters from Almaty, covering all five Central Asian states, the South Caucasus, Belarus, Mongolia, and Turkey. Mastercard describes Almaty as a regional hub and the heart of its consulting operations for the CIS, Central and Eastern Europe. Kazakhstan is unusual in Central Asia in having two major hubs. In functional terms, Astana complements Almaty much as Washington D.C. complements New York: Almaty is the deeper commercial center, while Astana concentrates government, sovereign institutions, diplomacy, and national policy. Astana has also developed regional corporate operations of its own. Alstom runs its Western and Central Asia cluster from the capital, and Mercuria opened a regional office there in 2026 headed by its CEO for Central Asia and the Caspian region. U.S. rail company Wabtec has made Astana a regional locomotive production and engineering base, reinforced by its $4.2 billion agreement as Kazakhstan expands its Middle Corridor links to...

City Planning

Almaty and Astana Set to Retain Central Asia’s Economic Lead

Almaty long combined Kazakhstan’s political and commercial functions and established itself as Central Asia’s leading business center. After Astana became Kazakhstan’s capital, the two cities developed increasingly complementary roles, with Almaty remaining the region’s largest business and financial hub while Astana accumulated political, institutional and corporate weight. Kazakhstan’s updated figures put Astana’s growth at about 10% and Almaty’s at about 5%. Together, the two cities generated roughly $107 billion in 2025. Together, they have become a two-city engine anchoring much of Central Asia’s commerce. Almaty and Astana benefit from an economic scale unmatched elsewhere in Central Asia. Kazakhstan alone accounts for more than half of the region’s GDP and roughly two-thirds of its inward FDI stock, according to TCA’s Central Asia Balance Sheet. That scale helps generate the fiscal resources needed to build and maintain the municipal infrastructure that supports business activity. Kazakhstan also has Central Asia’s most developed capital markets. The combination of the Kazakhstan Stock Exchange (KASE) in Almaty and the Astana International Financial Centre (AIFC) and Astana International Exchange (AIX) in Astana gives companies access to equity, debt, institutional investors and financial infrastructure at a scale no other market in the region currently matches. Kazakhstan is also the only Central Asian country with an investment-grade sovereign rating, lowering the country-risk premium and helping reduce financing costs for companies and projects relative to lower-rated regional markets. These advantages have been reinforced over decades. Almaty and Astana have long served as regional bases for major global companies, creating an established ecosystem of corporate management, finance, professional services and skilled labor. That track record, in turn, strengthens their ability to attract further investment and regional headquarters. Tashkent and Bishkek are also growing rapidly Then there is Tashkent. Uzbekistan’s political and commercial capital had an economy of about $29 billion in 2025, about 40% the size of Almaty’s and three-quarters that of Astana. Tashkent has also experienced rapid growth, with its economy growing by 11.3% in real terms in 2025, according to preliminary national figures. Tashkent benefits from Uzbekistan’s demographic scale. The country’s population is almost twice Kazakhstan’s, giving its capital access to a much larger domestic market and labor pool. But that scale also raises the need for sustained job creation and continued investment in housing and infrastructure. If productivity and investment fail to keep pace with population growth, the demographic advantage could increasingly act as a constraint rather than help Tashkent close the gap with Almaty and Astana. Almaty and Astana, meanwhile, generate substantially more economic output per resident. In 2025, Gross Regional Product (GRP) per capita was approximately $29,900 in Almaty and $23,700 in Astana, compared with about $9,300 in Tashkent, using reporting-year average exchange rates. These figures measure output per resident, not labor productivity, household income or living standards. Like Tashkent, Bishkek combines the roles of political capital and principal economic center. On the reporting years used here, however, its economy is only about 30% as large. Its economy grew by 15.8% in 2024, according to Kyrgyzstan’s...

Economic Growth

ADB Growth Forecast Points to Strong Expansion in Tajikistan

Asian Development Bank (ADB) forecasts that Tajikistan’s economy will maintain strong growth over the next two years, driven primarily by industrial expansion and the services sector. In its latest Asian Development Outlook (April 2026), the bank projects that gross domestic product will grow by 7.3% in 2026 and 6.8% in 2027. This follows an estimated 8.4% expansion in 2025, indicating a slight moderation but continued robust performance. ADB attributes the outlook to improving industrial competitiveness and rising value-added production, which are expected to support long-term economic development and job creation. “Tajikistan’s strong growth opens up opportunities to accelerate job creation,” said Ko Sakamoto, ADB country director for Tajikistan. “By developing competitive, value-adding industries from food processing and textiles to mineral products, the country can translate growth into more and better jobs.” At the same time, inflation is projected to rise to 4.0% in 2026 and 4.5% in 2027. According to ADB, this increase will be driven by stronger consumer lending, remittance inflows, higher public sector wages, supply chain pressures, and adjustments to utility tariffs. The bank noted that the outlook remains subject to revision given the uncertain regional environment. Despite recent gains, ADB cautioned that Tajikistan’s economic structure remains vulnerable. While industrial output has grown, the country continues to depend heavily on a narrow range of products. Exports are dominated by raw materials and low- to mid-level processed goods, with higher value-added manufactured products accounting for less than 10% of total merchandise exports. To address these challenges, the report recommends a broader, ecosystem-based industrial policy. This would involve support for specific sectors, along with improvements in infrastructure, workforce skills, access to finance, and the overall business environment. ADB’s earlier assessments highlight mixed socioeconomic trends. While poverty has declined significantly from 30.9% in 2020 to 19.9% in 2024, inequality and structural constraints continue to pose challenges to long-term development.

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.

Economy

Kazakhstan’s Economy Posts Fastest Growth in 14 Years

Kazakhstan’s economy expanded by 6.2% in the first half of 2025, marking the country’s fastest growth rate since 2011. The data was announced by Deputy Prime Minister and Minister of National Economy Serik Zhumangarin during a government meeting. Zhumangarin noted that a similar level of growth was last recorded in the first half of 2011, when GDP increased by 7.1%, eventually reaching 7.5% for the full year. Since then, annual growth rates have rarely surpassed 6%. By comparison, the economy grew 4.8% in 2024. “The current figure is 0.2 percentage points higher than the growth recorded in the first five months of this year and is the highest in the last 14 years. For context, growth during the same period in 2024 was just 3.2%,” Zhumangarin said. He cited the real sector (+8%) and the services sector (+5.2%) as the primary drivers. Key Growth Sectors Transport (+22.7%) and construction (+18.4%) led the surge, driven in part by a 35.2% increase in grain and flour exports, which totaled 11.8 million tons. The mining industry also posted steady gains, with oil production rising 11.6% and coal production up 11.7%, contributing to overall mining growth of 8.4%. Manufacturing expanded by 5.5%, buoyed by strong performances in machinery (+11.1%), food production (+10%), oil refining (+9.6%), metal products (+14.6%), construction materials (+8.6%), and chemicals (+7%). Agricultural output rose by 3.7%. Trade and Investment Outlook From January to May 2025, Kazakhstan’s foreign trade turnover reached $53.5 billion. Exports stood at $29.8 billion, including $10.2 billion in high value-added products. Imports rose by 2.2% to $23.8 billion, resulting in a positive trade balance of $6 billion. Prime Minister Olzhas Bektenov reaffirmed the government’s ambition to double Kazakhstan’s GDP by 2029, a goal originally set in 2023. “Last year, our GDP was $286 billion. This year, we expect to surpass the $300 billion mark. If current growth rates hold, we are capable of reaching $450 billion by 2029,” Bektenov stated at a press briefing. He emphasized that the government is investing in industrial development, economic diversification, and high value-added production to ensure that the majority of national revenue and profits remain within Kazakhstan. Diverging Forecasts Earlier this year, the Eurasian Development Bank forecast Kazakhstan’s GDP growth at 5.5% for 2025, with similar rates expected for 2026 and 2027. However, the European Bank for Reconstruction and Development (EBRD) recently downgraded its 2025 forecast from 5.2% to 4.9%, citing potential risks to oil output.

Caspian Sea

Kazakhstan Takes Bold Steps to Revive Caspian Sea Fishing Industry

For the first time in over 30 years, commercial fishing has resumed in Kazakhstan’s section of the Caspian Sea. On December 20, Deputy Minister of Agriculture Amangaliy Berdalin attended the ceremonial departure of fishing boats targeting sprat from the port of Sarzha in the village of Kuryk, located in the Mangistau region. Commercial fishing in the Mangistau region was active before 1991 but declined after the dissolution of the Soviet Union. Its revival is part of Kazakhstan’s broader efforts to develop a sustainable fishing industry and bolster food security. One of the first steps in this revival was the purchase of two fishing vessels by Aktau Balyk Company LLP. The company aims to catch approximately 10,000 tons of Caspian sprat annually, providing this resource to the domestic market. Plans are already underway to expand operations. Next year, Aktau Balyk intends to acquire four additional vessels, increasing its fleet and boosting its annual catch volume to 30,000 tons. The government’s commitment to revitalizing the fishing industry is underscored by the Program for the Development of Fisheries until 2030. This initiative prioritizes fish farming as a cornerstone of the sector's growth. According to the program: Kazakhstan aims to produce 270,000 tons of fish annually through fish farming by 2030. The government seeks to increase domestic fish consumption to 134,000 tons annually. Fish imports are targeted to drop from 45,000 tons to 25,000 tons annually. This strategic push signals Kazakhstan’s determination to establish a thriving fishing industry to meet domestic demand and position the country as a competitive player in the regional seafood market.