EDB releases Central Asian countries' GDP growths

25 July 2014 10:50 (UTC+04:00)

By Aynur Jafarova

Kazakhstan's GDP growth in the first quarter of 2014 decelerated to 3.8 percent, the Eurasian Development Bank (EDB) said.

This conclusion came in the new issue of the CIS Macromonitor published by EDB's Research Department.

"This deceleration is due to the impact of external, as well as internal factors, including weaker consumption and investments in the wake of the currency depreciation in February 2014, as well as lower crude oil production against the background of difficulties with building up oil production at the existing oil fields and a delay in launching the development of Kashagan field," the bank said.

The report said in May 2014, the activity indicators stabilized at a low level: the growth of the short-term economic indicator was 3.2 percent compared to May 2013.

In the second half of the year, the situation would be better.

"The improvement will, however, be more limited than it was expected earlier," EDB said.

The EDB experts believe the GDP growth in Kazakhstan will stand at 5.1 percent for the year against the background of greater geopolitical uncertainty and downward revision of the oil production forecasts.

The bank also said Turkmenistan's GDP growth continued to be high in the first quarter of 2014 at 10.3 percent.

"The contributing factors include the high investment activity in the framework of implementing government projects practically in all the sectors of the economy, high rates of wage growth, high foreign investments, as well as improved exports," EDB noted.

EDB also stressed the GDP growth in Uzbekistan continued to be high in the first quarter of 2014 (7.5 percent) in annual terms due to the high investment activity and growth of real incomes of the population, attraction of foreign investments, and active bank lending to the economy.

"The labor productivity in industry grew by 7.2 percent, the cost of production was reduced on average by 8.8 percent, while the energy intensity of GDP by 15 percent. Exports grew by 8.4 percent in volume terms," the bank added.

The bank went on to add that the GDP growth in Kyrgyzstan slowed down to 5.6 percent in the first quarter of 2014.

"The reasons for that include weaker domestic demand due to the decelerated rate of growth of remittances, as well as limited external demand due to weaker economic activity in the trade partner countries-Kazakhstan, Russia, and China; and the effects of administrative trade barriers in the Customs Union member states," EDB said.

EDB noted the GDP growth in Tajikistan decelerated owing to the lower growth in Russia and the unfavorable terms of trade in the international markets for Tajik exports, but it continues to be high at 7 percent in annual terms.

"There is a notable improvement in the performance of industry that is explained by the high rate of growth of the extracting industry and the faster growth in many sectors of the processing industry offsetting the recession in the metals and textile industries," the bank added.

Founded by Russia and Kazakhstan in January 2006, EDB is an international financial institution with a 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 exceeds $1.5 billion. The member states of the Bank are Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia and Tajikistan.