DUSHANBE, May 17, 2010, Asia-Plus — The report by the European Bank for Reconstruction and Development (EBRD), Regional Economic Prospects in EBRD Countries of Operation: May 2010 Update, notes that most transition countries have begun to recover, but the pace of recovery remains slow on average, with increasing divergence across countries.
This document is provided as background to the EBRD’s growth forecasts for its countries of operation, which are released three times a year.
The recovery has begun, but remains fragile, and is generally expected to be slower than in other emerging market regions, the report said.
According to the document, both the Russian and the Kazakh economies have been on a steep recovery path since the end of 2009, on the back of higher oil prices, large-scale fiscal stimulus packages and banking-system support. In both countries, several commercial banks have been taken over either by the government (Kazakhstan) or government-owned banks (Russia). Both Russia’s and Kazakhstan’s outlook for growth and exchange rate stability remain highly dependent on a stable development of commodity prices, particularly of oil, but also global sentiment in capital flows to emerging markets.
Tajikistan, Kyrgyzstan and Uzbekistan remain dependent on remittances inflows and undiversified economies that depend on shock-prone sectors such as gold mining, agriculture, and hydroelectric power. Turkmenistan and Uzbekistan continue to suffer from severely repressed financial systems.
In Tajikistan, economic growth in 2010 is expected to be close to 4 per cent. In 2001, Tajikistan’s gross domestic product is expected to rise 5 percent, according to the report.
In Turkmenistan and Uzbekistan, economic growth this year expected to be 12 and 7 percent respectively. The recent decline in exports of Turkmen gas to Russia is expected to be only partially offset by increased gas exports to China and Iran, resulting in lower growth in Turkmenistan.
In Kyrgyzstan, the current forecast envisages an output contraction of 0.7 per cent in 2010, reflecting the impact of the April political upheaval, which interrupted an economic recovery process that was under way since Q4 2009.
