World Bank: Middle Corridor could boost Georgia’s economy by 3.61%

The development of the Middle Corridor could increase Georgia’s economy by an additional 3.61% in the long term, according to a new World Bank report. The report estimates that Armenia’s economy could grow by 3.40%, while Azerbaijan’s could expand by 0.43%.

The report says countries across Europe and Central Asia can accelerate economic growth, create jobs, and attract private investment by developing and strengthening connectivity along a major trade route linking East Asia, Central Asia, the South Caucasus, Türkiye, and Europe.

Titled World-Class Trade and Logistics Along the Trans-Caspian Transport Corridor, the report states that strategic investments in the Trans-Caspian Transport Corridor (TCTC), also known as the Middle Corridor, could more than triple trade volumes along the route by 2040, halve transit times, increase regional GDP by 3.3%, and create an additional two million jobs.

According to the report, combining infrastructure investments with reforms aimed at improving trade and transport efficiency could quadruple freight volumes along the corridor by 2040, while reducing transit times by two-thirds.

The report says these gains could be achieved by addressing transport bottlenecks, improving supply-chain reliability, and expanding market access across the nine countries along the corridor - Armenia, Azerbaijan, Georgia, Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkey, Turkmenistan, and Uzbekistan. For the nearly 200 million people living in these countries, the improvements would also provide greater access to markets and economic opportunities.

“Railway state-owned enterprises along the TCTC differ significantly in scale, performance, and institutional development, directly affecting corridor outcomes. On the one hand, Kazakhstan Temir Zholy operates a large, high-density network (approximately 16,000 kilometers, approximately 303 million tons), which serves as the backbone of the corridor, benefits from relatively stronger assets, and is making progress toward commercial financing”, the report said.

“On the other hand, smaller but strategically critical systems, such as Georgian Railway (approximately 1,400 kilometers, 13.7 million tons), despite their modest size, stand out for their high utilization rates and relatively advanced governance and financial practices. Medium-sized systems, including Uzbekistan Railways (approximately 6,100 kilometers; 103 million tons) and Azerbaijan Railways (approximately 2,100 kilometers, 18.5 million tons), play important regional connectivity roles but remain in transition, with ongoing reforms to governance, tariffs, and operational systems”, the report added.

The World Bank noted that, by contrast, Turkish State Railways, despite operating a network of approximately 13,000 kilometers, carries a relatively small volume of freight - around 26 million tons - reflecting a system primarily focused on passenger services and significant untapped freight potential, despite ongoing reforms such as the functional separation of the sector.

“This diversity underscores that corridor performance is shaped not only by infrastructure but also by the institutional and operational capacity of these systems, with outcomes often constrained by weaker segments and uneven progress in reforms”, the report concluded.