DUSHANBE, October 16, 2014, Asia-Plus -- The new issue of The CIS Macromonitor published by the Research Department of Eurasian Development Bank (EDB) says that in Tajikistan, the growth in GDP decreased to 6.7% over the first six months of 2014.  

The report states that in July-August economic activity in the country worsened further.  All economic sectors had a slowdown because of weaker internal consumer demand, decreasing exports, and seasonal factors.

According to a consensus forecast, in 2014 GDP will grow by 6.2%.  In January-June the deficit in foreign trade reportedly increased by 42% year-on-year.

The international environment for main exports (aluminum and cotton) gives reasons to believe that prices will decrease further and the external demand will weaken, the report says.

As far as other Central Asia’s nations are concerned, the report says that Kyrgyzstan’s GDP growth slowed down to 4.1% over the first six months of 2014 (compared to 7.9% in Q1 2013) and the state budget deficit amounted to 1.1% of GDP.  The annual inflation rate was 8.5% in June.  EDB researchers expect Kyrgyzstan’s economy to grow at a moderate pace in the next three years.  EDB forecasts that the growth in the country’s GDP can be 4% in 2014, with a gradual increase to 4.7-5% in 2015-2016.  However, the underdeveloped financial markets, the low institutional effectiveness, the weak coordination between the fiscal and monetary policies, and the high public debt make it difficult to implement a balanced macroeconomic policy.

Meanwhile, the growth in Kazakhstan’s GDP improved to 4% in Q2, compared year-on-year (from 3.8% in Q1).  In the context of the international environment, which is unfavorable for Kazakhstan and affects external demand, the slight increase was due to the recovery of investment and rather strong consumption, despite devaluation.  However, the balance of payments worsened: in May/June the country’s gross international reserves decreased by US $1.9 billion, compared to April 2014, to US $26.5 billion.  The state budget’s surplus recorded in Q1 turned into a deficit and amounted to 0.9% of GDP after the first six months of the year.

The report states that until the end of 2014 Kazakhstan will be able to avoid a further slowdown in economic activity, however the growth in its GDP will be lower than in 2013. EDB forecasts it to be 4.2% in 2014 and 4.9% in 2015.

In Turkmenistan, the economy continued to grow at a high pace in Q2 and made it possible to maintain GDP at a level of 10.3% year-on-year after the first six months of the year.  The stable internal investment demand (8.2%) and consumer demand (a 10.7% increase in salaries) stimulated by state socioeconomic development and economic and infrastructure modernization programs, as well as high foreign investment coupled with increased exports (+9.3%) are the main triggers of Turkmenistan’s high growth.

In Uzbekistan, despite the unfavorable situation in international markets, the GDP growth increased to 8.7% in Q2 year-on-year and stood at 8.1% after the first six months of the year (7.5% in Q1).  This noticeable increase was due to intensified investment activity (+10.8% in Q1), the growth in aggregate population incomes (+18.8%), and stable exports (+8%).

The report concludes that in Q2 of 2014 the GDP growth in CIS countries continued to go down and reached 0.9% year-on-year.  The report states that the key factor beyond the economic slowdown in the CIS was the political crisis around Ukraine.  The resulting drastic growth in uncertainty, the outflow of capital from the region, and exchange rate fluctuations affected consumption and investment.  As a result, the economic indicators of all the three groups of CIS countries (oil and gas exporters, labor exporters, and countries with diversified exports) worsened.