BISHKEK (TCA) — Growth across the EBRD region is expected to pick up in 2016 and 2017 despite continued major risks, according to the Bank’s latest economic forecasts published on November 3.
The EBRD region, which stretches from southern and eastern Mediterranean countries to eastern Europe and Central Asia, is forecast to grow, on average, at 1.6 per cent this year (an upward revision of 0.2 percentage points since the previous EBRD forecast in May) and 2.5 per cent next year, compared with 0.5 per cent growth in 2015, the EBRD said.
Central Asia is slowing down. The region, where some countries depend on commodities and others on remittances from commodity-rich neighbours, is continuing to feel the impact of lower commodity prices, exacerbated by shaky investor confidence. Remittances from Russia have stabilised in local currency terms, but not in US dollar terms. NPLs have shot up in Tajikistan. Growth in the region may pick up thanks to higher oil prices and major projects in the extractive sector.
Russia, one of Central Asia’s major economic partners, is emerging from recession. Russia’s economy will still contract on average this year but gradual recovery is expected to take hold in the second half of 2016 and continue into 2017.
A modest recovery of oil prices from the lows seen in the first quarter of 2016 have contributed to a stronger outlook in Russia.
Currencies of major oil producers in the region continue to move in line with oil prices.
