DUSHANBE, April 16, 2011, Asia-Plus — Every country in the Emerging Europe and Central Asia (ECA) region is expected to grow in 2011, but some countries are vulnerable to rising food and energy prices, the World Bank said at a press briefing on April 15 during the World Bank/IMF Spring Meetings 2011.
According to press release, issued by the World Bank, Theodore Ahlers, Director of Strategy and Operations of the World Bank’s Europe and Central Asia region, noted that rising food and energy prices could push 5.3 million more people into poverty across Emerging Europe and Central Asia.
The World Bank notes the global food and energy price increases represent an opportunity for commodity exporters. Large oil exporters Azerbaijan, Kazakhstan and Russia, which account for 15 percent of the world’s oil production, are benefiting from higher prices which are boosting growth, current account and fiscal balances. At the same time food and energy price inflation represents an additional source of vulnerability for many net importers, particularly Armenia, Georgia, Kyrgyzstan, Moldova, and Tajikistan.
According to Yvonne Tsikata, Director for Poverty Reduction and Economic Management of the World Bank’s Europe and Central Asia region, the poorest people in the region will suffer the most from high food and energy price inflation which reduces their purchasing power. They are particularly vulnerable to food price inflation as food represents a large share of the poor’s consumption basket. In the most vulnerable countries, where poverty could increase the most, food price inflation averaged over 17 percent in 2010.
Food and energy price inflation is highest among the lower income countries of the region. The highest food inflation rates were in Kyrgyzstan (27 percent) and in Georgia (23 percent). Energy inflation is also the highest among the lower income countries of the region.
Poverty could increase in some of the lower income countries of the region. Potential increases in poverty rates could reach 11 percentage points for Kyrgyzstan, 9 for Armenia and Georgia, 8 for Tajikistan, and around 5 percentage points for Moldova.
In the meantime, Tajikistan’s inflation for the first quarter of this year stood at 4.5 percent and the government expects the year-end inflation to stand at 7.0 percent in 2011.
