BAKU, Azerbaijan, February 28. The European Bank for Reconstruction and Development (EBRD) is expecting Central Asia’s GDP to grow by 4.9 percent in 2023, Zsuzsanna Hargitai, EBRD Managing Director for Central Asia, told Trend.
"Central Asian states, such as Kazakhstan and Turkmenistan, are enjoying record high oil and gas revenues as a result of elevated prices and increased export volumes," she noted.
At the same time, according to the managing director, Kyrgyzstan, Tajikistan, as well as Uzbekistan continue to receive substantial remittances from Russia, where the demand for migrant workers is growing dramatically.
"The region is also experiencing very strong growth in real wages and public revenues. Many countries in Central Asia are benefiting from Russian households seeking to obtain international payment cards and place their foreign currency savings in Central Asia, as well as businesses relocating to Central Asia, taking advantage of special economic zones, such as Uzbekistan’s IT Park, created to capture digital nomads and exporters of IT services," she explained.
As a result, the region’s capital cities are experiencing a real estate boom, as well as strong expansion in hospitality and catering, Hargitai noted.
Regional economies, such as Kazakhstan and Kyrgyzstan, are also benefiting from re-exports of computers, consumer electronics and home appliances, spare auto parts, and electrical and electronic components, to Russia, often facilitated by small shuttle traders, the managing director said.
Meanwhile, she pointed out that regional currencies weakened after war in Ukraine started, but they have largely reverted to their pre-war values.
"Financial sector regulators brought in tougher compliance measures to reduce the risk of further collapses from any secondary sanctions. The most urgent challenge all Central Asian economies are facing today is inflation and, in the slightly longer term, debt service costs. CPI inflation is in the 10-16 per cent range, way above the target corridors, which jeopardizes the wellbeing of many households and puts structural reforms and fiscal consolidation measures at risk," she concluded.