The year 2021 will be a period of strong economic recovery for EDB member states

31 March 2021

The Eurasian Development Bank projects the aggregated GDP growth rate of its member countries at 3.3% in 2021, after a 3% decline in 2020. With progress in countering the pandemic, the easing of social distancing measures and favourable external economic conditions will be the key drivers of stronger consumer and investment demand. Most of the region’s economies will recover to pre-crisis levels by the end of 2021 and 2022. The EDB projects that the significant acceleration of inflation in the member states will be temporary, with inflation slowing down to an average of 4.5% year-on-year in the region by the end of 2021, from 6.3% year-on-year in February 2021. The risks according to the EDB’s projections remain high. Nevertheless, even with an unfavourable, prolonged pandemic, the Bank's member economies will be recovering in 2021.

Moscow, 31 March 2021. The Eurasian Development Bank (EDB) published its Macroeconomic Forecast with projections for the economic development of its member states for 2021 and the medium term. The review states that, at the beginning of this year, the global economy started to steadily recover. The Global PMI Composite Output Index remains above the 50-point threshold and amounted to 53.2 p.p. in February 2021. The Bank’s analysts note that recovery will be proceeding at an uneven pace, with manufacturing remaining the driver, while services continuing to struggle due to persisting constraints.

The EDB expects the global economy to be growing faster in 2021, as the pandemic recedes amid mass vaccinations, and major world economies preserve their current monetary and fiscal stances. The EDB projects the Eurozone’s GDP to grow by 4.3% in 2021, the U.S.’s by 5.5%, and China’s by 8.5%. The average Urals oil price in 2021 is expected to be around US $55 per barrel, which the Bank’s analysts believe is a comfortable level for the EDB’s region of operations.

The Macroeconomic Forecast notes that the year 2021 will become a period of strong economic recovery for EDB member states. The Bank projects the aggregated GDP growth rate of its member countries at 3.3%, after a 3% decline in 2020. The easing of social distancing measures and improvement of external economic conditions will be the key drivers of stronger consumer and investment demand. By the end of 2021, Kazakhstan and Russia’s economies will have grown by 4% and 3.3% respectively reaching pre-crisis levels. 

Economic recovery in Armenia and the Kyrgyz Republic will be completed during 2022. The long recovery in these countries will be largely due to the depth of their economic recession in 2020 and smaller fiscal capacity. The economies of Armenia, Kyrgyzstan and Tajikistan will receive additional support from remittances in 2021. The Bank projects Armenia’s GDP to grow by 3.3%, the Kyrgyz Republic’s 3.9%, and Tajikistan’s 6.1% in 2021.

EDB analysts believe that economic activity in Belarus in 2021–2022 will remain below pre-crisis levels. In 2021, its GDP growth is projected at 0.1%, as it will be constrained by weak domestic demand amid high uncertainty and worsening economic sentiment. 


The EDB expects its member countries’ currencies to stabilise against the U.S. dollar in 2021. At the beginning of this year, currencies of countries in the EDB region of operations remain relatively stable vs. the US dollar. The national currencies are supported by rising oil prices. At the same time, the Russian rouble continues to be affected by geopolitical risks, which limits the room for its strengthening. In 2021, the average exchange rate of the Armenian dram against the U.S. dollar is projected at around 521, the Belarusian rouble 2.63, the Kazakhstani tenge 421.6, the Kyrgyz som 84.9, the Russian rouble 73.6, and the Tajik somoni 11.5.

The Macroeconomic Forecast notes that the significant acceleration of inflation in the Bank’s member countries will be temporary and inflation will slow down in the second half of 2021. The main reason for the rise in consumer prices was a substantial global increase in food prices. Under the influence of this factor, inflation in the Bank’s region of operations remained high at the start of the year, averaging 6.3% year-on-year in February 2021. Pandemic-driven supply chain disruptions and COVID-19 response costs have exerted additional pressure on prices. The impact of all these factors on consumer prices will be gradually diminishing over 2021. Combined with stabilisation of the national currency exchange rates, this would help inflation in the region to fall to an average of 4.5% year-on-year by the end of 2021.


“Since the middle of 2020, we have seen a strong global trend in asset inflation,” says Evgeny Vinokurov, the EDB and EFSD Chief Economist. “By the end of February 2021, prices for all key commodity groups exceeded their pre-crisis levels. Food prices are now at its highest since 2013 and industrial metals have not been this expensive since 2011. Having started with metals and food, asset inflation subsequently spread to energy products. Since the beginning of this year, oil price has risen by more than 20% reaching pre-crisis levels. The strong rise in commodity prices is largely due to temporary factors. These include supply disruptions, pandemic-provoked disruptions to production chains, and the rapid recovery of the Chinese economy. Over time, the upward pressure of these factors on commodity prices will be diminishing and their growth will be slowing down. This is the development considered in the EDB’s base case scenario. But above all, asset inflation results from the ultra-soft monetary policies of the world’s major central banks, and the impact of this factor will be quite long-lasting.”

For the Eurasian region, which supplies raw materials to the global market, the rise in prices for metals and energy is generally positive. Export earnings are on the rise, government revenues are growing, and economic sentiment is improving. These positive effects are primarily observed in Russia and Kazakhstan. Thus, if Urals oil prices remain close to US $70 per barrel in the second to fourth quarters of 2021 (more than 20% above the EDB’s base case projection), the Russian economy could grow by 3.7% in 2021, a 0.4 p.p. increase compared to the base case. Kazakhstan’s GDP growth in the optimistic scenario could reach 4.5% in 2021, which is 0.5 p.p. above the base case forecast. Thanks to close economic and financial integration ties, positive effects will spread to other EDB member countries.

EDB analysts also believe that the economies in the Bank’s region of operations will recover, even with the lingering effects of the pandemic, but at a slower pace. The Bank assessed a risky scenario, assuming a slow global economic recovery and falling energy prices. In 2021, Russia’s GDP growth will reach 1.9% in the risky scenario, 1.4 p.p. below the base case forecast. Kazakhstan’s economy in the risky scenario will grow by 1.8 p.p. less than the base case forecast of 2.2%.

Ruslan Dalenov, Chairman of the EDB Management Board, summarised the key current trends and forecasts, “First, the EDB member economies have adapted to operate in a pandemic environment. Second, in 2021 the Bank’s member economies are expected to recover strongly. The aggregated GDP growth rate of the EDB member countries is projected at 3.3%. The EDB member economies will grow even if the risky scenario takes place. Third, with the growing budget deficits to finance active support measures, the public debt of the EDB member states increased by US $45.4 billion. Debt parameters remain fairly stable. That said, at the end of 2020, Russia and Kazakhstan’s public debts amounted to about 18% and 30% of their GDPs, respectively.”

Forecasts of key macroeconomic indicators of the EDB member countries (base case)




(at the enf of the year)

Exchange rate to U.S. dollar

(the year’s average)

IBL rate

(the year’s average)




































Kyrgyz Republic



























Note: GDP and inflation are in % change year-on-year; the exchange rate against the U.S. dollar is in units of the national currency per U.S. dollar; IBL is in % (or the refinancing rate for Tajikistan).

Source: EDB calculations

The Macroeconomic Review is available online here.

Other reports and papers by the EDB and the EFSD are available in the Research section on the Bank’s website and the Publications and Research section on the Fund’s website.

Additional Information:

The Eurasian Development Bank (EDB) is an international financial institution promoting integration and development in its member countries – Armenia, Belarus, Kazakhstan, the Kyrgyz Republic, Russia, and Tajikistan. The EDB's charter capital totals US $7 billion. The Bank was established in January 2006 by Russia and Kazakhstan and is headquartered in Almaty. The EDB’s portfolio mainly consists of transport infrastructure, energy, chemical, mining, and mechanical engineering projects with a high integration effect.

The Eurasian Fund for Stabilization and Development (EFSD) amounting to US$8.513 billion was formed on 9 June 2009 by the governments of the same six countries. The EFSD assists its member states in overcoming the consequences of the global financial crisis, ensuring their economic and financial stability, and fostering integration in the region. The EFSD member countries signed the Fund Management Agreement with Eurasian Development Bank giving it the role of the EFSD Resources Manager.

The EDB Media Centre:

Alexander Savelyev +7 (985) 765 23 59 (Moscow)

Azima Sapargaliyeva +7 (777) 750 00 08 (Almaty)

Sergey Gorbachev +7 (916) 727 22 00 (Moscow)


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