Key macroeconomic indicators tested for strength in EDB member countries in 2018

BISHKEK (TCA) — In 2018, the Eurasian Development Bank (EDB) member countries — Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan — faced challenges to the region’s macroeconomic stability, according to the quarterly Macroeconomic Review published by the EDB’s Directorate for Research late in December.

The publication suggests that the main risks were associated with the slowdown of economic growth, increasing protectionism in global trade, and high volatility in developing markets. The macroeconomic situation in the region evolved against the background of stronger geopolitical tensions. However, the authors believe that, despite the growing external challenges, it remained stable.

The important factors were that the fiscal policy in the majority of the EDB member countries was focused on stabilising economic development and that the countries pursued balanced monetary policies. The economic situation in the region improved due to favourable oil prices that persisted throughout the most part of 2018. All the EDB countries recorded positive economic growth in 2018, while inflation reached record low levels. Mutual trade between the EDB member countries continued to rise.

At the same time, the review points out that, in the short term, the region’s economies will be influenced by tactical decisions passed in response to growing external risks.

The EDB analysts forecast Russia’s economic growth to drop to 1.6% in 2019, from 1.8% in 2018, partly as the Bank of Russia toughened its monetary policy because of higher inflation risks. The growing tax burden since January 2019 is also expected to produce a short-term negative effect on economic activity, given that national projects are scheduled to enter their active phase by midyear.

Kazakhstan’s economic growth is forecast to slow down from 3.9% in 2018 to 3.3% by the end of 2019 as a result of monetary policy measures and the completion of major investment projects, while new projects have not entered their active phase.

The expected slowdown of economic growth in Armenia to 5.0% and Belarus to 1.6% is associated, among other factors, with the completion of economic recovery in these countries.

Kyrgyzstan is expected to speed up its economic growth to 3.9% by the end of 2019, as new production facilities will be commissioned.

Tajikistan’s economic growth, which is forecast to reach 7.0%, will be largely determined by the implementation of infrastructure projects.

Inflation risks have grown due to the higher volatility of exchange rates, as well as the depletion of the positive base effects in the food segment. In some countries, inflation may temporarily exceed the target. However, analysts believe, that the monetary policies of the EDB countries’ central banks will help to stabilise inflation and keep it within the targets.

The Eurasian Development Bank (EDB) is an international financial institution founded by Russia and Kazakhstan in January 2006 with the mission to facilitate the development of market economies, sustainable economic growth, and the expansion of mutual trade and other economic ties in its member states. The EDB’s charter capital totals US $7 billion. The member states of the Bank are Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan.

Sergey Kwan


Sergey Kwan has worked for The Times of Central Asia as a journalist, translator and editor since its foundation in March 1999. Prior to this, from 1996-1997, he worked as a translator at The Kyrgyzstan Chronicle, and from 1997-1999, as a translator at The Central Asian Post.
Kwan studied at the Bishkek Polytechnic Institute from 1990-1994, before completing his training in print journalism in Denmark.

View more articles fromTCA