Almaty, 26 December 2011. The Eurasian Development Bank’s (EDB) Research Department published a new issue of The CIS Macromonitor which analyses the performance of all the CIS economies in 2011 and provides forecasts for 2012.
The main conclusion made by the EDB experts is that the CIS economies had managed to improve their growth rates in 2011. According to preliminary data, the region’s GDP grew by 4.5% in January-September. Turkmenistan had the highest growth of 14.6% and Azerbaijan the lowest of 0.5%.
A noteworthy indicator in Q3 was a dynamic growth in agriculture by 14.7% on 2010. Industrial production has slowed down in almost all countries except Armenia, Kyrgyzstan and Moldova. The construction markets and financial systems have livened up: in the first nine months of 2011 Azerbaijan, Kazakhstan, Moldova and Russia demonstrated a higher growth in residential construction and increases in the region’s bank lending averaged 25.4%. In particular, private lending grew by 11.5% in Russia and 4.5% in Kazakhstan. Higher equity investments and stronger consumer activity suggest that the demand has generally revived.
A favourable situation in the global markets in raw materials has resulted in higher exports, hence the respective growth of oil and gas exporters such as Russia, Kazakhstan, Turkmenistan and Uzbekistan. However, higher oil and food prices have worsened the trade balance of oil and gas importers, including Armenia, Kyrgyzstan, Moldova, Tajikistan, and Ukraine. Yet, in some countries the increased prices of imports were balanced, to a certain extent, by high prices of their main exports (gold, aluminium, and cotton).
Russia and Kazakhstan’s economic growth had a positive effect on money transfers from labour migrants. These have stimulated the growth of the economies that export workforce. According to the Bank of Russia, in the first nine months of 2011 money transfers from Russia to the CIS countries (measured in USD) were 39% higher year-on-year.
In the first six months of 2011, the reserves of the region’s central banks increased by US $37.9 billion. Azerbaijan and Kazakhstan had the highest growth in foreign exchange reserves at 26.6% and 6.9% of GDP respectively, while Armenia’s foreign exchange reserves decreased to 3.4% of GDP.
The revival of the CIS economies had a positive effect on the fiscal sector. Many countries have demonstrated either a government budget surplus or a decrease in their budget deficit.
The region’s average inflation rate (except Belarus) fell from 11.4% in June to 7.1% in November 2011. Because of the continuing credit expansion, the annual inflation in Belarus soared to 106% in November 2011. Armenia was the most successful country to constrain inflation. Here, the annual price rise decreased from 11.5% in August to 4.8% in November.
The CIS Macromonitor states that the weighted average consensus forecast of GDP growth in the CIS for 2012 is 4.6%. Turkmenistan and Uzbekistan are expected to demonstrate the highest rates of 8.4% and 7.4% respectively, while Belarus and Russia will produce lower figures of 3% and 4.1% respectively.
The CIS Macromonitor includes an analytical insert The Effects of Oil Prices on the CIS Economies. The electronic version of the publication is available at:
https://eabr.org/analytics/
