The European Bank for Reconstruction and Development (EBRD) has revised its forecast for the economic growth in Central Asia to be more positive. In 2022 the GDP of five Central Asian states is going to increase by 4.3% and by a further 4.8% in 2023, according to the Regional Economic Prospects review.
In this document, the bank highlighted that almost all Central Asian economies demonstrate quite high levels of resilience to the rising geopolitical tensions.
The EBRD increased its forecast for Uzbekistan by 1.5%. It is expected that this and next year Uzbekistan’s GDP will reach 5.5% and 6.5% respectively. The bank believes that the economies of Kyrgyzstan, Tajikistan and Turkmenistan will grow by 7%. This means they are expected to grow faster than other countries, although the previous forecast for growth in these countries was 1%, 3% and 6%, respectively.
The report also says that countries of the region have managed to take advantage of the current situation. For instance, Kazakhstan and Turkmenistan’s oil and gas revenues soared thanks to sky-high prices in the global markets. Kyrgyzstan, Tajikistan and Uzbekistan receive more money transfers from Russia where their citizens work as Gastarbeiter. The entire region reports increasing salaries and state revenues.
However, Uzbekistan is still facing a high inflation rate because of increasing food and commodity prices. In July the rate reached 12.3%.
«Uzbekistan’s economy continues to grow rapidly thanks to a big population and domestic market, diversification of processing industries and progress in economic reforms,» the report said.
Another benefit for Central Asian countries is the desire of many Russians to keep their money in these countries and use local banking cards. Moreover, businesses from Belarus, Russia and Ukraine continue to relocate to the region.
As a result, Central Asian capital cities are full of newcomers, a trend that has already caused a buzz in the real estate market, hospitality and food industry. On the other hand, Kazakhstan and Kyrgyzstan also make money by selling computers, home appliances and other consumer goods in Russia.