The Eurasian Development Bank (EDB) has issued its periodical macroeconomic review of its member countries. On the whole, it reflect a positive picture of the growth pattern in its region of operations.
The report says:
Analysts of the Eurasian Development Bank (EDB) have released the latest Macroeconomic Review for the Bank’s six member states.
EDB’s analysts note that most member countries continue to display robust growth: the aggregate GDP of the EDB’s region of operations increased by 4.6% YoY in January -June 2024, after an increase of 3.9% in 2023.
In January-June 2024, economic activity in Armenia accelerated to 10.4% YoY, propelled by a dynamic increase in industrial output (primarily, precious metals processing).
Belarus’s economy grew by 5% YoY during the same period, driven, among other things, by growth in industrial production and agriculture, while maintaining positive growth dynamics in most other sectors.
Kazakhstan’s economy is recovering from the consequences of spring floods, as evidenced by leading indicators. The GDP grew by 3% YoY in the first half of 2024, fueled by an increase in industrial production and the service sector.
The Kyrgyz Republic experienced a GDP growth rate surge to 8.7% YoY in January–July 2024, largely due to intensified investment activity.
In Russia, industrial production remains the primary driver of economic growth. In the first half of 2024, the nation’s GDP grew by 4.7% YoY; however, the signs of potential economic slowdown gradually become apparent.
In the first half of 2024, Tajikistan maintained a high GDP growth rate of 8.2% YoY, supported by strong domestic demand driven by both consumption and investment.
Investment activity continues to grow in most countries of the region. In Armenia, it is supported by a steady increase in public investment and housing construction. In Belarus and Russia, import substitution programmes are growing, driven, among other things, by public investment. Kazakhstan is building up its strategy for the development of mechanical engineering, planning to expand the programme to other sectors. Investment growth in Kyrgyzstan is largely driven by investment in energy, transport and extractive industries, while Tajikistan keeps actively investing in energy facility construction.
Inflation remains heterogeneous across the region: in Armenia, Kyrgyzstan and Tajikistan, inflation dropped below target levels. In Belarus, the growth in the cost of the basket of goods remains within the target corridor. That said, inflation in Russia and Kazakhstan continues to stay above target levels.
The Macroeconomic Review states that the economic activity in the world’s largest economies will not have a stimulating effect on the economy of the Bank’s region of operations. GDP growth is expected to slow down in the United States, the European economy is recovering at a slow pace, and business activity in China still remains at a high level notwithstanding a certain decline in the second quarter of 2024. Amid growing concerns about economic activity in developed countries, central banks have started cutting interest rates or plan to do so in the near future. EDB’s analysts do not rule out the risks of a slowdown in business activity in key global economies, and assess the potential consequences for the economies of the region through a risk scenario.
The Macroeconomic Review is a regular publication by the EDB, providing a roundup of the macroeconomic situation and projecting near-term developments in the member countries. The Review also contains detailed statistics on key macroeconomic indicators.
The Eurasian Development Bank (EDB) is a multilateral development bank investing in Eurasia. For more than 18 years, the Bank has worked to strengthen and expand economic ties and foster comprehensive development in its member countries. The EDB’s charter capital totals $7 bln. Its portfolio consists principally of projects with an integration effect in transport infrastructure, digital systems, green energy, agriculture, manufacturing, and mechanical engineering. The Bank’s operations are guided by the UN Sustainable Development Goals and ESG principles. /// nCa, 20 August 2024