Kyrgyzstan's GDP to grow by 4.2 percent at year-end 2023 - EDB forecast
Analysts of the Eurasian Development Bank (EDB) made a macroeconomic forecast for 2023-2025. They also shared their vision of the development of three main trends in the global economy and their impact on the Eurasian region.
The first is a slowdown in inflation with its elevated level compared to the last decade. The second is the completion of the cycles of tightening monetary policy in developed countries. The third is a slowdown in world economic growth rates.
It is noted that the external conditions for the economies of the Eurasian region in 2023 will be characterized by high inflation in developed countries and restrained demand for export products of the countries in the region.
EDB Chief Economist Evgeny Vinokurov speaks of a significant slowdown in the global economy.
«Increased inflation and sharply rising interest rates will slow down economic growth in the largest economies. We estimate U.S. GDP growth at 0.4 percent this year. We assume the possibility of a recession in some quarters of 2023 and 2024, and a significant recovery growth of 2.8 percent is expected only in 2025. The recovery will be even slower in the euro-zone, at 0.3 percent in 2023 and 1.9 percent in 2025.
In China we forecast an acceleration in GDP growth to 5.6 percent this year amid the abandonment of a strict quarantine policy, but there are prerequisites for a slowdown in the republic’s economy in the medium term.
Given the U.S. election cycle, turbulence in the financial sector and heightened recession risks will push the Federal Reserve System to cut rates as early as in the third quarter of 2023,» he said.
The economies of the Eurasian region will demonstrate a high degree of resilience to adverse external economic conditions in the medium term. The forecast for the current year has been improved for all member states of the bank. The main factors behind the revision were the strong results of the beginning of 2023 against the backdrop of a fairly quick adaptation of economies to the changed operating conditions in 2022 and support from fiscal policy in a number of countries. EDB analysts expect the region’s GDP to grow by 1.5 percent this year.
Economic growth in Kazakhstan can reach 4.3 percent in 2023 and 4.4 percent in 2024-2025. Economic activity will be supported by the implementation of government initiatives aimed at diversifying the economy and strengthening investment potential, as well as expanding production capacities. Strong domestic demand and an increase in mutual trade will ensure high growth rates this year in other EDB member countries as well.
GDP of Armenia will increase by 7.5 percent, Kyrgyzstan — by 4.2 percent, Tajikistan — by 7.9 percent.
EDB analysts predict a slowdown in inflation aggregated for the region of the bank’s operations to 6.4 percent in 2023 from 12.4 percent last year.
The main factors will be the adaptation of the economies and the recovery from the shock of early 2022, when there was a sharp increase in devaluation and inflation expectations. Inflation in Armenia is projected at 2.5 percent this year, Belarus — 7.8 percent, Kazakhstan — 7.9 percent, Kyrgyzstan — 7.1 percent, Russia — 6.1 percent, Tajikistan — 6.6 percent.
In 2024-2025, inflation in most countries of the region is expected to approach the target values.
