The Asian Development Bank (ADB) has slightly raised its economic forecast for economies in Caucasus and Central Asia 2023. The upward revision reflects an improved outlook for Kazakhstan and Tajikistan for 2023.
The growth forecasts for the Caucasus and Central Asia are revised up to 4.8% for 2023 from September’s 4.6% projection and down to 4.6% from 4.7% for 2024, according to the Asian Development Outlook (ADO) December 2023 released on 13 Dec 2023.
The growth outlooks for some other economies in the subregion have somewhat moderated.
Tajikistan’s economy grew by 8.3% in the first 9 months of 2023, up from 7.8% in the same period last year—and this robust growth is expected to be sustained by the opening of several factories in the country.
Armenia’s economic activity index, a proxy for GDP, suggests the economy grew by 9.7% in the first 9 months on buoyant services and higher construction output. Georgia grew by 6.8% in the same period on sizable external inflows, reexports of vehicles, and a recovery in tourism. Azerbaijan grew by 0.8% in the first 9 months from 5.6% in the same period last year amid cuts in mining and weaker services output.
Growth in the Kyrgyz Republic slowed to 4.2% from 6.3% on declining gold production.
The hydrocarbon sector drove growth in Turkmenistan.
Uzbekistan’s growth rate in the first 9 months declined to 5.8% from 6.2% in the same period last year on a subsiding consumption boom.
The forecasts for growth in Kazakhstan, the largest economy in the Caucasus and Central Asia, are raised to 4.5% for 2023 from September’s 4.1% projection and maintained at 4.3% for 2024. Growth rose by 4.7% in the first 9 months of 2023, driven by higher oil production and housing construction supported by state programs. Mining grew by 5.4%, construction by 12.6%, services by 5.1%, and manufacturing by 3.2%. Unfavorable weather caused agriculture production to fall by 9.9%. The central bank’s consolidated business activity index and the business climate index both improved in October, suggesting an optimistic outlook by the country’s business community.
The government submitted an expansionary 2024 state budget to Parliament, with overall expenditure growth rising by 6.7% from 2023, and further revised up its oil projection for 2024. Yet, many energy experts expect that delays in completing the Tengiz oil field expansion could affect oil extraction.
Inflation projections for the Caucasus and Central Asia are revised up to 10.9% for 2023 from September’s 10.6% forecast, and to 8.4% from 8.0% for 2024. The upward revision for this year reflects higher projections for Kazakhstan from September’s forecasts, to 14.0% from 12.7% for 2023 and to 8.7% from 7.6% for 2024. Kazakhstan’s inflation rate averaged 15.5% in the first 10 months of 2023.
The government approved higher utility tariffs in July, and the central bank cut its key policy rate by 50 basis points to 16% in October. Inflation is expected to be lower than September’s forecasts for some of the subregion’s smaller economies.
Lower food prices slowed inflation in Tajikistan to an average 5.1% in the first 9 months from 5.7% in the same period of 2022. Uzbekistan’s inflation rate averaged 10.2% in the first 10 months, down from 11.2% in the same period last year, as price increases for both food and nonfood products decelerated.
The full text of the Asian Development Outlook (ADO) December 2023 is available here: https://www.adb.org/sites/default/files/publication/931316/ado-december-2023.pdf
Asian Development Outlook is the main economic forecasting product from ADB. It is published each April with an update published in September and brief reports published in July and December.///nCa, 14 December 2023