Compared to other regions of the world, Central Asia, in the most basic terms, can be differentiated among the countries by its dependence on the commodity exports. However, the non-exporters face the same economic challenges as the rest of the world. The statement came during the UN Regional Briefing on World Economic Situation & Prospects 2023, answering the nCa question.
The briefing was held online on 2 February 2023 by Shuvojit Banerjee, ESCAP Economic Affairs Officer.
Here is complete transcription of his answer, related to outlook for Central Asia:
nCa Question: What will be the growth prospects for Central Asian region?
“Compared to other regions of the world, Central Asia, in the most basic terms, can be differentiated among the countries by its dependence on the commodity exports.
The commodity exports tended to come out better in the past year because of the unexpected jump in the commodity prices, which has been a support to their economies. However, the other countries [of Central Asia] that are not commodity exporters, are facing similar pressures as the other countries in the world i.e the rising cost of living, rising energy prices, rising commodity prices as well and all the attendant problems in terms of [?] depreciation, monetary tightening etc.
Of course, on top of that, Central Asia with its proximity to the war in Ukraine, some countries [in the region] have been more directly affected than the other parts of Asia.
Also, because of the war in Ukraine, because of the very direct dependence of some of the economies on Russia and Ukraine, they have been directly impacted by the war.
This can be seen through a number of channels – the key here is the remittance channel. A number of people in Central Asian economies are working in Ukraine and more particularly in Russia. The flows have been reduced or they have been coming back to the home countries. So, there is the remittance aspect and there are other aspects of the war such as the supply disruptions, impact of the sanctions on these countries in terms of relations these countries have with Russia and Ukraine. Also, the supply bottlenecks due to sanctions”.
A series of severe and mutually reinforcing shocks — the COVID-19 pandemic, the war in Ukraine and resulting food and energy crises, surging inflation, debt tightening, as well as the climate emergency — battered the world economy in 2022. Against this backdrop, world output growth is projected to decelerate from an estimated 3.0 per cent in 2022 to 1.9 per cent in 2023, marking one of the lowest growth rates in recent decades.
The World Economic Situation and Prospects 2023 presents a gloomy and uncertain economic outlook for the near term. Global growth is forecast to moderately pick up to 2.7 per cent in 2024 as some of the headwinds will begin to subside. However, this is highly dependent on the pace and sequence of further monetary tightening, the course and consequences of the war in Ukraine, and the possibility of further supply-chain disruptions.
The tepid global economic prospects also threaten the achievement of the 17 Sustainable Development Goals (SDGs), when the 2023 SDG Summit in September marks the mid-point of the implementation of the 2030 Agenda.
“This is not the time for short-term thinking or knee-jerk fiscal austerity that exacerbates inequality, increases suffering and could put the SDGs farther out of reach. These unprecedented times demand unprecedented action,” said António Guterres, United Nations Secretary-General.
“This action includes a transformative SDG stimulus package, generated through the collective and concerted efforts of all stakeholders,” he added.
The publication “World Economic Situation and Prospects 2023” can be downloaded from here:
///nCa, 2 February 2023