EDB - The Times Of Central Asia

Viewing results 1 - 6 of 13

Hydropower Development in Kyrgyzstan Gets Boost from EDB

The Eurasian Development Bank (EDB), the Ministry of Economy and Commerce, and the Ministry of Energy of Kyrgyzstan have signed a trilateral Memorandum of Cooperation for the Suusamyr-Kokomeren Hydropower Plant (HPP) Cascade Project. The memorandum outlines the EDB’s commitment to providing financial support for the preparation of project documentation, including a pre-feasibility study. The agreement focuses on developing the financial and economic model for the project, estimating capital costs, evaluating social and environmental impacts, and determining technical solutions and government support measures needed for its success. The Suusamyr-Kokomeren HPP Cascade will be located on the Kokomeren River and is expected to play a pivotal role in Kyrgyzstan’s energy sector. The cascade will consist of three hydropower plants with a combined capacity of 1,305 MW, meeting the country’s increasing electricity demands. Sanjar Bolotov, Kyrgyzstan’s Deputy Minister of Economy and Commerce, emphasized the significance of the project, commenting: “This major project will not only meet the country’s domestic electricity needs but also position Kyrgyzstan as a leading exporter of clean energy in the region.” The EDB is a multilateral development bank that includes Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan as member states. It is dedicated to investing in regional development initiatives across Eurasia. The Suusamyr-Kokomeren HPP Cascade is part of the EDB’s flagship investment initiative, the Central Asian Water and Energy Complex. This mega-project aims to strengthen water and energy cooperation among Central Asian countries while addressing local socio-economic challenges.

Forecast EDB Economic Reforms Economic Growth Economy

EDB Thinks Tajikistan and Kyrgyzstan Will Show Strongest Growth in 2025

The Eurasian Development Bank (EDB) forecasts that Tajikistan and Kyrgyzstan will lead regional economic growth in 2025. According to the bank’s Macroeconomic Forecast, published on November 5, GDP growth rates for Kyrgyzstan are given at 8.7%, Tajikistan at 8.4%, and Kazakhstan at 5.5%. For comparison, the corresponding figure for Russia is just 2.4%. Tajikistan’s robust growth is attributed to rising prices for gold and other export metals, coupled with reduced costs for imported energy and food products. These factors are expected to enhance economic efficiency by freeing up funds for consumption and investment. Additionally, the country’s rapidly growing population remains a central driver of its economic expansion. Similarly, Kyrgyzstan’s strong economic performance will be fueled by industrial development, high investment activity, and resilient domestic demand. However, in both Kyrgyzstan and Tajikistan, industrial growth and investment activity are anticipated to lag behind GDP expansion. Kyrgyzstan and Tajikistan are expected to grow above the global average, supported by steady exports and robust domestic demand. Kazakhstan’s economy will benefit from increased oil production, large-scale government infrastructure projects, and supportive fiscal policies. The EDB predicts that inflation across the region will gradually decline, from 7.9% in 2024 to 6.4% in 2025. High interest rates will remain a key tool in controlling inflation, with rates expected at 7.3% in Kazakhstan by the end of 2025. Inflation in Kyrgyzstan and Tajikistan is projected to remain within target levels, reaching 5.0% and 5.8%, respectively. These lower inflation rates are expected to support continued economic stability in both countries.

Economy EDB Regional Security Economic Growth Regional Development GDP

Central Asia’s Economy Expands Fourfold Over Two Decades, Outpacing Global Growth Rates

Over the past two decades, the gross domestic product (GDP) of Central Asia has grown fourfold in real terms and sevenfold in nominal terms, according to Evgeny Vinokurov, Deputy Head of the Eurasian Development Bank (EDB). Vinokurov highlighted significant improvements in the region’s economic landscape. Over the same period, population mobility has tripled, and incoming investments have surged by more than 17 times. Vinokurov emphasized that the last two years have underscored Central Asia’s status as an economically attractive and strategically important region. Positioned at the heart of Eurasia, Central Asia boasts strong transport and transit potential, a growing consumer market, and expanding opportunities for investment. Despite external challenges, the region’s economies have displayed remarkable resilience, maintaining steady growth and weathering global shocks effectively. Between 2022 and 2023, Central Asia’s economies grew at an average annual rate of 4.8%, significantly outpacing the global average of 3.4%. This makes the region’s growth rate 1.4 times faster than the global average. Vinokurov projected that Central Asia’s nominal GDP will surpass $500 billion in 2024. Despite these achievements, Central Asia faces complex challenges that require regional collaboration. Key issues include: -- Lack of access to the sea: Geographical isolation limits trade and economic integration. -- Climate and environmental risks: These pose threats to sustainable development. -- Water and energy management: Disjointed policies among countries hinder efficiency and sustainability. Vinokurov stressed the importance of joint efforts to address these challenges. Coordinated development of water and energy resources, renewable energy, and the Eurasian transport framework can yield cost-effective and efficient solutions. Central Asia’s impressive economic growth over the past 20 years reflects its potential as a key economic and transit hub in Eurasia. While the region faces significant challenges, collaborative solutions and investments in infrastructure and sustainability could unlock further growth and prosperity.

EDB Healthcare Social protection Population Labour market Growth Forecasts

Central Asia’s Population Surpasses 80 Million, With Rapid Growth Expected to Continue

The population of Central Asia has reached a historic milestone, exceeding 80 million people as of December 2024. Projections indicate this figure could surpass 100 million by 2050, highlighting the region’s rapid demographic growth and the challenges it brings for sustainable development. Rapid Population Growth According to the Eurasian Development Bank’s (EDB) macroeconomic forecast, Central Asia’s population has grown by nearly one and a half times over the past 24 years, increasing by approximately one million people annually. Tajikistan and Uzbekistan lead the region in demographic growth. Tajikistan’s population reached 10 million at the beginning of 2024, marking an 80% increase since 1991. Uzbekistan, the region’s most populous country, has maintained an annual growth rate of 1.1–1.2%, with its population now exceeding 36.7 million. The region as a whole has a youthful demographic profile, with an average age of 26.2 years. Diverging Population Estimates PopulationPyramid.net estimates Central Asia’s 2024 population at over 82 million. The discrepancy with other sources likely arises from differing methodologies and data collection techniques. Despite this, all sources agree that the population has surpassed the 80 million mark. Future Projections and Challenges Central Asia’s population is expected to exceed 100 million by 2050. However, rapid demographic growth presents serious challenges for the region. Key concerns include: • Sustainable Economic Development: Ensuring that economic growth keeps pace with population increases. • Job Creation: Addressing the needs of a growing labor force. • Quality of Life: Improving access to education, healthcare, and essential services. Managing these issues will be a top priority for state policies in the coming decades, as governments seek to balance population growth with sustainable development.

Finance Banking Infrastructure Economic Growth Infrastructure Development EDB Investment Projects

EDB Supports Construction of Strategic Highway in Kyrgyzstan

The Eurasian Development Bank (EDB) has pledged up to $200,000 for a preliminary feasibility study for the Bishkek - Kuntuu - Belogorka - Suusamyr highway. This alternative route aims to connect Kyrgyzstan’s capital, Bishkek, with the southern and western regions of the country. An agreement for technical assistance was signed on December 5 between the EDB and Kyrgyzstan’s Cabinet of Ministers. Strategic Importance The proposed highway is expected to have significant strategic, economic, and social benefits for Kyrgyzstan. Beyond improving transport infrastructure, it will facilitate access to mineral deposits and create new employment opportunities both during construction and operation. Nikolai Podguzov, Chairman of the EDB Management Board, emphasized the project’s importance: “This initiative is part of the Eurasian Transport Framework, a key investment mega-project. It aims to strengthen transport connectivity among Kyrgyzstan’s economic centers while increasing the transit potential of Kyrgyz highways and attracting greater interest in road transportation through Kyrgyzstan from neighboring countries.” Alleviating Traffic and Economic Growth Deputy Minister of Transport and Communications Bekzhan Rysmendeev highlighted the project’s role in addressing existing infrastructure challenges. “The Bishkek—Osh highway, Kyrgyzstan’s main arterial road, currently handles 5,000 to 18,000 vehicles per day and is struggling to accommodate the growing traffic flow,” he explained. The new highway is set to reduce the travel distance by 164 kilometers compared to the existing route, providing an alternative pathway to southern regions and improving access to mining areas. “This public-private partnership project will ease congestion on the Bishkek—Osh route, contribute to economic and social development, and foster international and domestic tourism and trade,” Rysmendeev added. Regional Connectivity As part of the EDB’s broader mission to invest in Eurasia, this project aligns with the bank’s goals of enhancing regional connectivity and economic development. The EDB, a multilateral development institution, includes Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan as its member countries.

Finance Banking Economy Currency money National Bank EDB

EDB Forecasts Strengthening of the Tenge in 2025

The Eurasian Development Bank (EDB) has projected a strengthening of Kazakhstan’s national currency, the tenge, in 2025. This forecast was presented by Aigul Berdigulova, a senior analyst at the EDB’s Country Analysis Center, during the bank’s macroeconomic outlook for the Eurasian Economic Union (EAEU) member states. Exchange Rate Outlook The tenge’s exchange rate has been under significant pressure, depreciating from 495 KZT per U.S. dollar in mid-November to 523.58 KZT by December 5, according to Kazakhstan’s National Bank. Exchange offices have reported rates as high as 525 KZT per dollar. The National Bank attributes this decline to external factors, such as fluctuating global commodity prices - critical to Kazakhstan’s export economy - and the weakening of the Russian ruble, a key trade partner’s currency. Internal factors, including heightened demand for foreign currency, have further contributed to the tenge’s volatility. To stabilize the market, the National Bank intervened with $1.2 million from the National Fund in November. Despite these challenges, EDB analysts anticipate a rebound in 2024 and beyond. “We believe the current volatility in Kazakhstan’s currency market is temporary,” said Berdigulova. She emphasized that the National Bank and government are employing timely measures, including mandatory sales of 50% of foreign currency earnings by quasi-governmental entities and increased transfers from the National Fund. The EDB forecasts the average annual exchange rate in Kazakhstan to reach 486 KZT per dollar in 2025, a slight depreciation from the projected 466 KZT per dollar in 2024. By 2026-2027, the tenge is expected to stabilize at around 497 KZT per dollar. Inflation and Monetary Policy High inflation remains a concern. The EDB predicts inflation in Kazakhstan will decline to 7.3% by the end of 2025, hindered by rising tariffs for housing and utilities. To manage inflation, the National Bank is likely to maintain a high prime rate, above 15%, through the first quarter of 2025. However, as inflationary pressures ease, the rate may decrease to 11.25% by late 2025. External Influences and Oil Revenues Marina Sobolevskaya, head of the EDB’s Country Analysis Center, acknowledged that the Russian ruble's depreciation would continue to impact the tenge, with the ruble expected to weaken from 92.5 per dollar in 2024 to 104 per dollar in 2025 and 107 per dollar by 2027. On the other hand, Kazakhstan’s currency could gain support from increased oil production, particularly from expanded operations at the Tengiz oil field. Higher exports and foreign currency inflows could mitigate currency fluctuations in the domestic market. Short-Term Recovery The possibility of a short-term recovery for the tenge was also suggested by Murat Temirkhanov, an advisor at Halyk Finance. He attributed recent volatility to a surge in demand for dollars, driven by sanctions-induced ruble depreciation. Temirkhanov argued that the tenge-dollar exchange rate’s sensitivity to the ruble is overstated, given the relatively small share of ruble settlements in Kazakhstan’s foreign trade. Halyk Finance estimates the tenge’s current exchange rate of 525 KZT per dollar is above its fundamental value, which should be closer to 505 KZT per dollar....