DUSHANBE, October 17, Asia-Plus – A presentation of the report entitled “Regional Economic Outlook: Middle East and Central Asia” was held in a form of videoconference in four Central Asia’s states (Tajikistan, Kazakhstan, Kyrgyzstan and Uzbekistan) yesterday.
The report prepared by the IMF’s Middle East and Central Asia Department provides a broad synopsis of recent macroeconomic developments and prospects tendencies and economic policy in the region
David Owen, Senior Adviser, IMF’s Middle and East and Central Department, telling the videoconference noted that growth in the world economy is the highest over the past 30 years and global growth is projected at slightly over 5 percent for the year as a whole. “Real GDP growth in Central Asia’s is high. Central Asian countries are growing strongly – well above global average,» said Owen, “Prospects of growth for near future are good as well.”
On inflation, the IMF expert noted that inflation has risen – on average now above 10 percent, fueled by higher oil prices and strong credit growth.
He also noted that external surplus is growing as the region continues to benefit from strong inflows. Owen also noted remittance inflows have grown rapidly in recent years, pointing to the importance of remittances for the countries of the region, especially for Tajikistan and Kyrgyzstan. Thus, remittances to Tajikistan amount to 20 percent of the country’s GDP.
Besides, fiscal policy is generally strong and government debt remains on a downward path relative to GDP in the countries of the region.
Dwelling on key policy challenges, the IMF expert noted that to achieve development goals Tajikistan should make good use of increased donor support, while avoiding a new cycle of excessive borrowing.
On risks to the outlook, David Owen noted that the region is heavily dependant on volatile oil and non-oil commodity prices, and rising global interest rates could reduce capital inflows. “It is necessary to tighten monetary policy and appreciate exchange rate in response to permanently higher inflows,” Owen said, “Public management bodies need to avoid excessive external borrowing.”
On the common policy issues, he noted that adjustment to higher oil prices remains a challenge. Both oil producers and consumers should ensure that changes in world oil prices are passed through quickly to domestic product prices, while strengthening compensation mechanisms for the poor, according to him.
Besides, he pointed to the necessity of continuing structural and institutional reforms to create favorable conditions for development of private sector.
Economists as well as representatives of media from Almaty, Bushkek, Dushanbe and Tashkent discussed the report.
