It follows from the report that despite the fact that the growth of country economies will slow down after a steady acceleration in recent years, the positive dynamics of growth will continue in each individual country in the region. Exception is the Georgian economy, which the bank belongs to the Central Asian region, where the bank expects that GDP growth in 2020 will be reduced to zero.
Growth in the subregion will collectively decline to 2.8% in 2020, primarily as a consequence of economic fluctuations around the world and due to lower world prices for raw materials. Lower oil prices and declining industrial production will weaken oil exporters. Growth will slow to 0.5% in Azerbaijan and 1.8% in Kazakhstan, the largest economy in the subregion, which will also have a slowdown due to reduced public investment. Fiscal consolidation and a reduction in remittances from the Russian Federation will weaken growth in Tajikistan. Georgia’s economy, which is highly dependent on tourism and trade, will be particularly vulnerable to COVID-19, as closed borders and monetary policy measures will tighten the situation in 2020. Growth in Armenia, a metal exporter particularly well known for its sales in China, will plummet this year. A less drastic effect of a fall in mineral exports to China will be affect economies in the Kyrgyz Republic and Uzbekistan.
Subregional inflation is expected at 7.6%. Tightening monetary policy is expected to reduce inflation in Georgia and Uzbekistan in 2020 and 2021 and in Kazakhstan in 2021. Data on GDP growth and inflation are presented in the table.
Source: ASIAN DEVELOPMENT OUTLOOK, April 2020