EDB economies: strengthened prerequisites for sustainable growth (macroeconomic Review)
Moscow, 7 September 2017. In July, economic developments in the EDB countries showed improvements in consumption. Stabilised and recovered consumer activity, as well as sharpened investment and increased exports help to consolidate and diversify the basis for the recovery of the region’s economic growth.
This is one of the findings of the monthly Macroeconomic Review prepared by the Chief Economist Group at EDB.
In July, all the region’s countries demonstrated positive growth in retailing: Russia 1%, Belarus 4.9%, Armenia 3.2%, Kazakhstan 9.2%, the Kyrgyz Republic 3.1%, and Tajikistan 5.2% year-on-year respectively. EDB analysts believe this was due to a recovery in wages and the growing lending activity in the consumer segment.
The report points out that the improved economic dynamics in the EDB countries has led to upgrades in their rating outlooks: this has been already announced for Russia and other countries in the region are catching up. In particular, Moody’s has affirmed Kazakhstan sovereign rating at Baa3 and upgraded its outlook from negative to stable. Tajikistan has obtained its first credit ratings for the placement of Eurobonds. Moody’s rated Tajikistan at B3/stable and S&P at B-/stable. Fitch Ratings affirmed Belarus’s long-term foreign- and local-currency issuer default ratings at B-, having revised the outlook on them from positive to stable. The agency notes the country’s improved access to external financing and increased international reserves that have reduced financing risks for 2017 and 2018.
“The EDB member countries have prerequisites for economic growth and consumption recovery while the region’s largest countries maintain increased interest rates, the reduction in which, with the attainment of record low inflation rates, will help to strengthen lending activity,” Yaroslav Lissovolik, Chief Economist at EDB, notes. He also said that important factors supporting consumers include stabilised foreign exchange rates and reduced inflation, increased migrants’ remittances and relatively low unemployment in the region’s largest countries (Russia and Kazakhstan).
The report states that the key risks for consumption recovery are external shocks associated with global raw material prices and the persisting burden of bad debts in the banking sector of some EDB countries.
To access the full version of the monthly Macroeconomic Review, use this link.
All Macroeconomic Reviews are available here
Key macroeconomic indicators of the EDB countries
|
Indicator |
|
|
|
Forecast |
||
|---|---|---|---|---|---|---|
|
2014 |
2015 |
2016 |
2017 |
2018 |
2019 |
|
|
Armenia |
||||||
|
Inflation (growth in %, year-end) |
4,6 |
-0,1 |
-1,1 |
2,3 |
3,6 |
4,0 |
|
GDP in comparable prices (growth in %, y/y) |
3,6 |
3,0 |
0,2 |
5,2 |
3,0 |
4,1 |
|
Exchange rate, local currency against US dollar (average for the year) |
416 |
478 |
480 |
484 |
490 |
497 |
|
Belarus |
||||||
|
Inflation (growth in %, year-end) |
16,2 |
12,0 |
10,6 |
8,0 |
6,9 |
5,8 |
|
GDP in comparable prices (growth in %, y/y) |
1,7 |
-3,8 |
-2,6 |
1,4 |
1,2 |
1,2 |
|
Exchange rate, local currency against US dollar (average for the year) |
1,02 |
1,59 |
1,989 |
1,954 |
2,104 |
2,189 |
|
Kazakhstan |
||||||
|
Inflation (growth in %, year-end) |
7,4 |
13,6 |
8,5 |
7,2 |
6,5 |
5,5 |
|
GDP in comparable prices (growth in %, y/y) |
4,2 |
1,2 |
1,0 |
3,4 |
3,1 |
3,7 |
|
Exchange rate, local currency against US dollar (average for the year) |
180 |
223 |
342 |
325 |
340 |
352 |
|
Kyrgyzstan |
||||||
|
Inflation (growth in %, year-end) |
10,5 |
3,4 |
-0,5 |
6,8 |
7,2 |
6,9 |
|
GDP in comparable prices (growth in %, y/y) |
4,0 |
3,9 |
3,8 |
3,7 |
3,9 |
4,1 |
|
Exchange rate, local currency against US dollar (average for the year) |
53,7 |
64,5 |
69,9 |
69,6 |
71,7 |
75,2 |
|
Russia |
||||||
|
Inflation (growth in %, year-end) |
11,4 |
12,9 |
5,4 |
3,9 |
4,1 |
4,0 |
|
GDP in comparable prices (growth in %, y/y) |
0,7 |
-2,8 |
-0,2 |
1,4 |
1,5 |
1,7 |
| MIACR interest rate (% per annum) |
8,5 |
12,8 |
10,6 |
9,2 |
7,5 |
7,3 |
|
Exchange rate, local currency against US dollar (average for the year) |
38,4 |
60,9 |
67,1 |
59,4 |
61,4 |
64,0 |
|
Tajikistan |
||||||
|
Inflation (growth in %, year-end) |
6,1 |
5,8 |
6,1 |
11,7 |
10,3 |
8,5 |
|
GDP in comparable prices (growth in %, y/y) |
6,7 |
6,0 |
6,9 |
6,2 |
6,1 |
5,8 |
|
Exchange rate, local currency against US dollar (average for the year) |
4,9 |
6,2 |
7,8 |
8,5 |
9,4 |
10,0 |
Source: National agencies, EDB calculations
Retailing (in comparable prices, increase in % year-on-year)
|
Country |
Year |
Jan |
Feb |
March |
Apr |
May |
Jun |
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Armenia |
2016 |
-3,3 |
0,2 |
-1,3 |
-3,1 |
-3,6 |
-2,9 |
-6,5 |
-5,6 |
-3,3 |
-1,1 |
-0,8 |
-0,7 |
|
2017 |
3,6 |
4,6 |
6,7 |
9,0 |
9,5 |
3,5 |
3,2 |
- |
- |
- |
- |
- |
|
|
Belarus |
2016 |
-3,4 |
-2,9 |
-4,2 |
-1,5 |
-5,2 |
-1,6 |
-4,8 |
-4,9 |
-4,3 |
-6,1 |
-6,0 |
-3,9 |
|
2017 |
-4,6 |
-2,8 |
2,8 |
0,5 |
2,9 |
2,0 |
4,9 |
- |
- |
- |
- |
- |
|
|
Kazakhstan |
2016 |
-7,3 |
-1,1 |
-0,8 |
0,0 |
2,2 |
0,3 |
0,1 |
4,1 |
0,1 |
5,6 |
0,0 |
6,4 |
|
2017 |
3,5 |
5,5 |
7,3 |
5,6 |
8,9 |
4,6 |
9,2 |
- |
- |
- |
- |
- |
|
|
Kyrgyzstan |
2016 |
4,9 |
6,0 |
4,5 |
2,9 |
5,9 |
6,3 |
6,3 |
8,3 |
18,4 |
9,7 |
4,5 |
17,7 |
|
2017 |
4,2 |
3,8 |
3,5 |
3,7 |
2,9 |
4,6 |
9,2 |
- |
- |
- |
- |
- |
|
|
Russia |
2016 |
-6,2 |
-3,7 |
-5,0 |
-4,3 |
-5,3 |
-5,0 |
-4,3 |
-4,2 |
-3,1 |
-4,3 |
-4,2 |
-5,2 |
|
2017 |
-2,1 |
-2,6 |
-0,2 |
0,1 |
0,7 |
1,2 |
1,0 |
|
- |
- |
- |
- |
|
|
Tajikistan |
2016 |
2,3 |
4,3 |
4,6 |
1,7 |
2,7 |
7,2 |
16,9 |
14,4 |
14,6 |
-1,2 |
7,0 |
6,3 |
|
2017 |
4,4 |
1,5 |
3,0 |
3,9 |
4,0 |
5,1 |
5,2 |
- |
- |
- |
- |
- |
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.
EDB Media Center:
+7 (727) 244 40 44 ext. 6147 (Almaty)
+7 (495) 645 04 45 ext. 2732 (Moscow)
e-mail: pressa@eabr.org
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