The subregional growth projection for the Caucasus and Central Asia in 2022 is raised from 3.9% in the September Update of Asian Development Outlook (ADO) 2022 to 4.8% for 2022, while the projection for 2023 remains unchanged at 4.2%, ADB said in a recent supplement to the ADO 2022.
The upward adjustment for 2022 reflects robust growth in many economies in the subregion as spillover from the Russian invasion of Ukraine has so far been benign. The Russian economy has fared better than expected, and exports to Russia from the subregion have continued to be strong, the report adds.
Caucasus and Central Asia comprises Armenia, Azerbaijan, Georgia, Kazakhstan, the Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan.
According to the report, hydrocarbon exporters have benefited from high energy prices, and several subregional economies have benefited from inflows of people and money from the Russian Federation.
In January–October 2022, the Kyrgyz Republic expanded by 7.0%, benefiting again from inflows of tourists, workers, and firms from the Russian Federation, especially after the announcement on 22 September of a military draft in the Russian Federation, and from significant money transfers that fueled consumption.
In January-September 2022, Uzbekistan grew by 5.8% as the primary income surplus expanded with the arrival of seasonal migrant workers; Azerbaijan grew by 5.6%, reflecting high growth in construction, manufacturing, and services; and Tajikistan expanded by 7.8%, with industry as a primary driver of growth. Growth in Turkmenistan appears to have benefited from buoyant gas exports.
Notwithstanding its close economic links with the Russian Federation, Kazakhstan, the subregion’s largest economy, grew by a modest 2.8% in the first 3 quarters of 2022. The projections of 3% growth, mentioned in ADO September Update remains unchanged, since petroleum export through the Caspian Pipeline Consortium is still restricted.
The subregional inflation projection for 2022 is raised from 11.5% in the Update to 12.5%. The forecast for 2023 remains unchanged at 8.5%. Inflation persisted in many economies in the subregion and mainly reflects higher food prices.
Notably, the growth projection in wider developing Asia and Pacific for 2023 is trimmed by 0.3 percentage points to 4.6% as a darkening global outlook is expected to slow expansion in every subregion except the Caucasus and Central Asia.
ADO is published every April, with an update in September and brief supplements published normally in July and December.
Asian Development Outlook (ADO) 2022 Supplement: Global Gloom Dims Asian Prospects can be downloaded from here: https://www.adb.org/outlook
///nCa, 28 December 2022