EDB Monitoring of Mutual Investments — 2024. Eurasian Region
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Report
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Summary
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Key conclusions
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Presentation
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The Eurasian Development Bank continues the series of publications of its flagship analytical project dedicated to the monitoring of mutual foreign direct investment (EDB MMI) in the countries of the Eurasian region.
The EDB MMI is based on a database of investment projects, which is formed “from the bottom up” from open sources and contains detailed information on projects in the Eurasian region.
According to the EDB MMI, the total volume of mutual direct investment stock (hereinafter - mutual investments, FDI) in the Eurasian region amounted to $46.1 billion by the end of 1H of 2024.
The three main recipients of investment in the Eurasian region are Kazakhstan, Uzbekistan, and Azerbaijan, at $10.4 billion (22.6%), $10.2 billion (22.1%), and $5.8 billion (12.6%), respectively. Together, these three countries accounted for almost 60% of the total mutual FDI stock at the end of 1H 2024. Kazakhstan showed a record 17% growth in attracted mutual FDI by 2022.
Azerbaijan is the leader in the ratio of exported mutual investments to GDP. This indicator amounted to 6.6% of GDP at the end of 1H of 2024 and increased significantly compared to 2022 (4% of GDP).
Private companies accounted for 68% of mutual FDI stock in the Eurasian region at the end of 1H of 2024.
In terms of sectoral distribution, the main sectors of mutual investment are extractive industries (35.6%), manufacturing (15.2%), and transport and logistics (11.6%). Together, they accounted for more than 60% of total mutual FDI at the end of H1 2024.
The manufacturing sector has contributed the most to the growth of mutual investment in the region. Mutual FDI in manufacturing increased by $1.1 billion since 2022 to $7 billion at the end of H1 2024. This sector has the largest number of active projects (93).
The agro-industrial sector has shown continuous growth in mutual FDI since 2016: the average annual growth rate is 6.7%. Since 2022, the volume of mutual investments in this sector increased by 22% to $2.2 billion at the end of 1H of 2024.
Directions of mutual investment stock in the Eurasian region, $ millions
Source: EDB MMI Database.
Intra-regional investments of Central Asian countries
In Central Asia, domestic mutual investments reached $834 million at the end of 1H of 2024, which is 40% higher than in 2022.
The highest growth dynamics are in the manufacturing sector, where mutual investments increased 2.5-fold by 2022.
Kazakhstan is the leader in Central Asia as an investor country: 80% of all exported investments in the region or $671 million by the end of 1H of 2024.
Uzbekistan's importance as a local investor in Central Asia is growing. Direct investments from Uzbekistan increased from $24 million in 2022 to $164 million at the end of 1H of 2024.
Medium-term trends in mutual investments
The Eurasian region will be characterized by the following medium-term trends in mutual investments:
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1. Greenfield projects will remain the priority form of new investment.
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2. The manufacturing sector will be the most attractive for mutual investments.
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3. Active growth of new projects will continue in the agro-industrial sector.
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4. Uzbekistan will strengthen its role in mutual investments (as both an exporter and importer of capital).
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5. The role of Central Asia as a center for attracting mutual investments will increase.