BAKU, Azerbaijan, January 12
By Nargiz Sadikhova - Trend:
Kazakhstan remains vulnerable to large swings in global commodity prices, World Bank’s Global Economic Prospects Report said, Trend reports citing the WB.
Growth in ECA is forecast to slow to 3 percent in 2022—about half the pace of 2021—as tighter macroeconomic policy and recurrent COVID-19 outbreaks, including from Omicron, weigh on demand.
Regional growth is forecast to continue to ease in 2023, slowing to 2.9 percent, as fiscal support continues to be withdrawn. The boost from external demand is expected to fade in 2023, as global and euro area growth decelerate and commodity prices edge down.
The outlook has been downgraded by an average of 0.8 percentage point over 2022-23, partly owing to a sharp rise in policy uncertainty or geopolitical tensions in some large economies, which is anticipated to dent investment.
The weaker outlook in the near term also reflects a faster removal of monetary policy accommodation than envisioned because of inflationary pressures.
Risks to the baseline forecast for the region remain tilted to the downside. Further COVID-19 outbreaks may occur, especially in economies with low vaccination rates. The spread of the Omicron variant could strain health systems in ECA, which could prompt additional restrictions.
A prolonged pandemic could weigh further on the recovery in the euro area, generating negative spillovers in ECA economies with close trade and financial ties. Slower-than projected growth in China could be propagated through trade and commodity price channels to industrial commodity exporters in the region, which have become increasingly reliant on China as an export destination. The region’s energy exporters—Kazakhstan and Russia— remain vulnerable to large swings in global commodity prices