EDB changes its 2017 economic growth forecast for the region upward from 1.3% to 1.6% (Macroeconomic Review)

10 august 2017

Moscow, 10 August 2017. The key macroeconomic indicators point at an improvement in the member countries of Eurasian Development Bank (EDB) in the first half of 2017. That is highlighted in the Quarterly Macroeconomic Review prepared by the EDB Chief Economist’s Group.

The recovery of world commodity prices, combined with weakening foreign exchange imbalances, has a positive effect on trade flows of the EDB member countries. “While in Q1 2016, exports of goods and services declined in all the EDB member countries, excluding Armenia, this year all these countries, without exception, have demonstrated some positive export growth—the preliminary balance of payments statistics show that Armenia’s exports of goods and services grew in Q1 2017 by 17.8% against the same period of last year, in Belarus this indicator grew by 20.7%, in Kazakhstan — by 24.5%, in Kyrgyzstan — by 20.5%, in Russia — by 33.7%, and in Tajikistan — by 22.7%. The economic recovery in Russia contributed to an improvement of the macroeconomic indicators in Armenia, Kyrgyzstan, and Tajikistan through the remittances channel,” notes Yaroslav Lissovolik, EDB Chief Economist.

The economic recovery, accompanied by subsiding inflationary risks, has had a positive effect on the household living standards in the region. In Q1 2017, unlike in the same period of last year, real wages displayed some positive dynamics in the EDB member countries. Kazakhstan was an exception, with its rates of wage decline decelerating by 0.7 percentage point to 2% against the same period of last year.

The authors of the report note that the economic recovery observed in the EDB member states in the first half of 2017 has triggered a revision of the 2017 GDP forecast. The GDP growth forecast for Russia has moved upward by 0.3 percentage points to 1.4%. More significant revisions have been made for Kazakhstan and Armenia. The lagged effect of expansionary fiscal and monetary policies in 2016, combined with the quickly recovering remittances, was reflected in Armenia’s consumer demand dynamics registered in the first half of 2017. Against this background, the 2017 GDP growth forecast for Armenia has been revised upward from 2.9% to 5.2%. In Kazakhstan, the faster than expected economic recovery due to the favourable external economic environment and a more prominent effect of commissioning certain new facilities has laid the ground for improving the 2017 GDP forecast, which is estimated at 3.4%.

The full version of the “EDB Quarterly Macroeconomic Review” is available online.

EDB Quarterly Reviews are available online.

The special report “Macroeconomics of Eurasia” is available online.

Additional Information:

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. EDB’s charter capital totals US $7 billion. The member states of the Bank are the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic, the Russian Federation, and the Republic of Tajikistan.

Read more about EDB at: http://eabr.org/

 EDB Media Centre:

+7 (727) 244 05 45, ext. 6147 (Almaty)

+7 (495) 645 04 45, ext. 2724 (Moscow)  

pressa@eabr.org

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