EDB monitoring: Kazakhstan, the main recipient of mutual direct investment in the Eurasian region, has shown record increase in attracted investment. Azerbaijan is the leader in the export of investment GDP-wise.
The total mutual investment stock in the Eurasian region amounted to $46.1 bln, which is 2% more than in 2022. A major share is provided by private companies (68% i.e. $31.2 bln as of mid-2024). The share of Central Asian countries in the structure of attracted mutual investments exceeded 50% and reached $23.4 bln.
The geography of the EDB Monitoring of Mutual Investments in the Eurasian region has been expanded by the investment projects related to Mongolia and now includes 13 states.
Almaty, December 18, 2024 The Eurasian Development Bank (EDB, the Bank) continues its series of publications under the flagship analytical project dedicated to monitoring mutual foreign direct investment (MMI) in Eurasian countries.
The EDB's MMI is based on a database of investment projects containing detailed information on mutual investment stock (i.e. mutual FDI) in the Eurasian region. The database is formed using a bottom-up approach and is based on comprehensive data from public sources.
According to the EDB's MMI, the total amount of mutual direct investment stock of Eurasian countries reached $46.1 bln by the end of 1H 2024.
The main recipients of investments in the Eurasian region are Kazakhstan, Uzbekistan, and Azerbaijan – $10.4 bln (22.6%); $10.2 bln (22.1%) and $5.8 bln (12.6%), respectively. In total, these countries account for almost 60% of the total mutual FDI accumulated by mid-2024. That said, Kazakhstan showed a record 17% increase in attracted mutual FDI by 2022.
Azerbaijan is the regional leader in terms of invested funds to the national GDP ratio. This figure amounted to 6.6% of GDP as of the end of 1H 2024 and increased significantly compared to 4% of GDP in 2022.
Private companies account for 68% of mutual FDI stock in Eurasia as of mid-2024. The priority sector for private business' investing is extractive industries (45% of private investments).
Directions of mutual investment stock in Eurasian countries, $ mln
Source: EDB MMI database
A record number of new investment projects were launched in the Eurasian region in 2023 – 31 projects worth $2 bln, the highest number for the past few years.
In terms of sectoral distribution, the main sectors of mutual investments are extractive (35.6%), manufacturing (15.2%) and the transport and logistics sector (11.6%). In total, they account for over 60% of the total mutual FDI stock by the end of 1H 2024.
The manufacturing sector has the largest number of active projects (93). The dynamics of mutual FDI growth in this sector was the highest since 2022: the $1.1 bln (+20%) increase - to $7 bln at the end of 1H 2024.
The agro-industrial sector has been demonstrating continuous growth in mutual FDI since 2016 with an average annual rate of 6.7%. Since 2022, the sector has demonstrated an increase of $0.4 bln (+22%) - to $2.2 bln at the end of 1H 2024.
Intra-regional FDI from Central Asian countries reached $834 mln as of mid-2024, which is 40% higher than in 2022. Mutual investments in the manufacturing sector increased 2.5 times compared to 2022, thus demonstrating the highest growth rates of FDI stock.
Kazakhstan is the largest regional investor in Central Asia. The Republic accounts for 80% of the total exported investments ($671 mln at the end of 1H 2024).
The importance of Uzbekistan as a local investor in Central Asia is growing. Direct investments from Uzbekistan increased 6.8 times – from $24 mln in 2022 to $164 mln at the end of 1H 2024.
Intra-regional investment stock in Central Asia (sector-wise), $ mln
Source: EDB MMI database
Considering the changes in the structure and geography of supply chains, as well as the development of industrial cooperation, the following medium-term trends in mutual investments are expected to be characteristic for the Eurasian region:
1. Greenfield-projects will remain the priority form of new investments;
2. The manufacturing sector will be the one attracting the highest amount of mutual investments;
3. The number of new projects in the agro-industrial sector will keep growing actively;
4. Uzbekistan will increase its role in mutual investments (as an exporter and importer of capital);
5. The importance of Central Asia as a centre of mutual investment attraction will grow.
More information about the report and research materials can be found on the Bank's website
Additional Information:
The Eurasian Development Bank (EDB) is a multilateral development bank investing in Eurasia. For more than 18 years, the Bank has worked to strengthen and expand economic ties and foster comprehensive development in its member countries. The EDB's charter capital totals $7 bln. Its portfolio consists principally 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.
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