EURASIA’S ECONOMIC OUTLOOK: DIVERGING GROWTH PATHS AND STRUCTURAL CHALLENGES

The economic situation in the Eurasian region is highly dynamic and can fluctuate depending on various factors. Global economic fluctuations, changes in energy prices, and political developments, particularly in recent years, are among the primary factors affecting the economies of the countries in the region.

The Eurasian region has recently faced a rather mixed economic picture. According to the World Bank's "Europe and Central Asia" report, regional economies are expected to grow approximately 3.3% in 2024, but this rate is expected to drop to approximately 2.6% in 2025. These figures are quite weak compared to the average growth rates of over 5% for the region in the early 2000s.

Meanwhile, macroeconomic forecasts published by the Eurasian Development Bank (EDB) project relatively strong performance for some Central Asian countries. For example, projected growth rates for 2025 include values ​​of ~5.5% for Armenia (but not Albania), ~5.5% for Kazakhstan, and ~10% for Kyrgyzstan. This data indicates that while the Eurasian region is experiencing a weak overall growth rate, there are significant differences by country. Countries that export oil, natural gas, or raw materials, or those that rely on migrant workers' remittances, may grow faster, while in larger economies, either external pressures or structural problems are slowing growth.

Major and Emerging Economies in the Region

For example, the Russian economy is experiencing slower growth due to monetary policy tightening, production capacity constraints, and labor market problems. According to the World Bank, growth for Russia is projected to be around 1.6% in 2025, down from 3.6% in 2023. This is a relatively low rate, and such a slowdown in a major economy in the region could have indirect impacts on other countries, medium-sized and small-sized countries.

On the other hand, some countries in Central Asia are showing a more dynamic outlook. For example, Kyrgyzstan's growth rate is projected to be around 10% for 2025. This high growth is driven by factors such as strong domestic demand, the construction sector, and remittances from overseas workers.

Stability Concerns

One of the biggest risks for many countries in the region is the lack of structural reform. According to the World Bank, the majority of jobs in the region are in low-skilled fields, limiting the ability to raise average incomes. In addition, the external dependence of the region's economies, such as commodity exports and economic ties with Russia and China, and global uncertainties increase the pressure on growth.

Other important factors that support or constrain growth include:

Inflation remains high in some countries: For example, annual inflation in Kyrgyzstan was approximately 11.3% in the first quarter of 2025.

Investment is particularly increasing in logistics, e-commerce infrastructure, and industrial sectors. For example, the EDB's infrastructure trends report states that "e-commerce is experiencing a 25% annual growth rate in the region, and the number of users could reach 91.4 million by 2028".

There is still much to do in terms of energy investments: Clean energy spending in the region is still low, with fossil fuel investments accounting for the vast majority of total spending.

Dependence on foreign trade and external conditions poses risks: Economies in the region are significantly dependent on raw material prices, the economic situation of major partner countries, and global demand.

In summary, the Eurasian region is experiencing a cautious yet promising economic period. While some countries are showing signs of strong growth, significant obstacles remain to sustainable, high growth and income growth across the region in the medium term. The most important tasks for policymakers will be to invest in human capital, diversify the economy, and utilize their own resources more effectively by reducing external dependence.

References:

https://www.bbc.com/news

https://dergipark.org.tr/tr/search?q=Türk%2520diplomasisi%2520ve%2520afrika§ion=article