Published: 15 May 2015 г.
Latest EBRD economic forecast: growth is subdued in Central Asia due to recession in Russia, lower commodity prices. Economies in Central Asia, including Mongolia, are set to continue growing this year, according to the EBRD’s latest Regional Economic Prospects report. But the pace of expansion is slowing because of recession in Russia and lower commodity prices.
As the Russian economy has declined, remittances from Russia to Central Asia and to eastern Europe and the Caucasus have been declining “at an alarming rate”, the report says.
Partial data for the first quarter of 2015 suggest that remittances may now be declining at rates similar to – or even higher than – those seen at the height of the global economic crisis in 2009.
This trend is likely to continue in the following three quarters in year-on-year terms (see chart).
The decline in remittances reflects not only the weaker Russian rouble, but also the return of a significant number of migrants to their home countries. Hundreds of thousands of migrant workers are reported to have returned to Tajikistan and Uzbekistan. The return of workers from Russia and from Kazakhstan – where growth has also slowed following the oil price decline – to the Kyrgyz Republic is also significant.
The report, published during the EBRD’s Annual Meeting in Tbilisi, says: “Migration on this scale poses the significant challenge of how to absorb returning workers into the domestic economy.”
The economies of Central Asia are expected to grow more strongly than other regions covered in the EBRD report. Average expansion of 3.7 per cent is forecast for 2015 and 4.1 per cent for 2016.
In Kazakhstan, the economy will grow by 1.5 per cent this year, rising to 2 per cent in 2016; in the Kyrgyz Republic, the economy will grow by 3 per cent this year and 3.1 in 2016; Mongolia will grow by 4 per cent this year and 3 per cent in 2016; Tajikistan will grow by 3.8 per cent this year and by the same 3.8 per cent in 2016; Turkmenistan’s economy will grow by 9.5 per cent in 2015 and 10 per cent in 2016; Uzbekistan is predicted to grow by 7 per cent this year and 7.2 next year.
The economy of Russia, the key trading partner and source of remittances for Central Asia, is forecast to shrink by 4.5 per cent this year.