BISHKEK (TCA) — Economic growth in the Europe and Central Asia region is projected to pick up to 2.4 percent in 2017, driven by a recovery in commodity-exporting economies and improved confidence, the World Bank said in the report Global Economic Prospects – January 2017: Weak Investment in Uncertain Times, released on January 10.
The report said the forecast depends on a recovery in commodity prices and an easing of geopolitical tensions.
Russia is expected to grow at a 1.5 percent pace in the year, as the adjustment to low oil prices is completed. Azerbaijan is expected to expand 1.2 percent and Kazakhstan is anticipated to grow by 2.2 percent as commodity prices stabilize and as economic imbalances narrow. Strengthening activity in Russia and Kazakhstan will support other economies in the region, including Armenia, Belarus and the Kyrgyz Republic, through rising trade and remittances.
According to the report, growth in the Europe and Central Asia region is estimated to have accelerated to 1.2 percent in 2016, due mainly to an easing of the recession in Russia, which accounts for almost 40 percent of regional GDP, as oil prices stabilized.
Russia contracted by 0.6 percent in 2016, a shallower recession than expected, due to the suspension of a fiscal rule and injections of capital and liquidity into the banking sector. The depreciation of the currency was also a supporting factor. For two other large energy exporters in the region, Azerbaijan and Kazakhstan, the acute phase of the shock of lower commodity prices may be over, but contractions in non-oil activity weighed on growth. Azerbaijan contracted 3 percent in 2016 while Kazakhstan eked out a 0.9 percent growth pace, the report said.