A report released by the Eurasian Development Bank (EDB) on November 10 focuses on structural changes in the economies of Central Asia’s nations.

The Economy of Central Asia: A Fresh Perspective provides a renewed perspective on Central Asia as a large, dynamic and promising economic region and analyses its current structural changes and major growth areas.

It, in particular, notes that Central Asian countries’ aggregate GDP has grown more than sevenfold over the past twenty years, reaching US$347 billion.  Since 2000, the region’s share of global GDP at purchasing power parity has reportedly grown 1.8 times.  Its population of 77 million has increased by a factor of 1.4 since 2000, forming a capacious sales market and an expanding pool of labor resources. Demographic data suggest that the workforce will continue to grow in the future.

The average annual economic growth rate for Central Asian countries has been 6.2% over the past two decades compared to developing countries’ growth rate of 5.3% and the world average of 2.6% per year. Increases in export revenues, migrant workers’ remittances and foreign direct investment have reportedly fostered income growth and reduced poverty.  The report notes that in most countries of the region, GDP per capita at PPP increased threefold.  In 2021, the region’s foreign trade in goods totaled US$165.5 billion, a sixfold increase over the past 20 years.  Mutual trade between the countries is reportedly growing even faster than their total foreign trade.

EDB analysts estimate that inward FDI stock in Central Asia totals US $211 billion.  Over the past 20 years, this figure has reportedly increased more than seventeen-fold.  While FDI in the region is growing, its structure, both country- and sector-specific, reflects certain challenges.  The lack of openness of some of the countries, their remoteness from major economic centers and the fact that countries have no access to the world ocean continue to affect international investors’ perception of the region.  The ratio of FDI relative to GDP, excluding investment in the commodity sectors, is below the global average, indicating that the region is underinvested.  In particular, about 70% of FDI stock in Kazakhstan, the region’s main recipient of foreign investment, is in the oil and gas sector. 

The Eurasian Development Bank (EDB) is an international financial institution investing in Eurasia.  For more than fifteen years, the Bank has worked to strengthen and expand economic ties and foster comprehensive development in its member countries – Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan.  The EDB's charter capital totals US$7 billion.  Its portfolio mainly consists of projects with an integration effect in transport infrastructure, digital systems, green energy, agriculture, manufacturing, and mechanical engineering.  The Bank’s operations are guided by the UN Sustainable Development Goals and ESG principles.