What drives financial development in Central Asian Countries

Abstract

This paper tries to study the key macroeconomic variables influencing economic growth in Central Asian
countries from 1990 to 2023, using panel data analysis. The study focuses on the role of financial development, particularly
in developing countries like Uzbekistan, Tajikistan, Kyrgyz Republic, Kazakhstan, and Turkmenistan. The independent
variables such as broad money, private sector credit, foreign direct investment (FDI), government consumption, and trade
are examined. The findings show that broad money and government consumption have significant positive impacts on
financial development, while private sector credit and trade show mixed effects. The results highlight the importance of
targeted financial policies and investment strategies to foster economic development in the Central Asian regions.