"The economies of the EBRD regions expanded by an estimated 6.6 per cent in 2021 after contracting by 2.6 per cent in 2020 as Covid-19-related restrictions were phased out and people’s mobility (movements to places of work and recreation) returned to pre-pandemic levels. Growth is expected to decelerate to 1.7 per cent is 2022, a downward revision of 2.5 percentage points relative to the forecast made in November 2021, as Russia’s invasion of Ukraine has been having a profound impact on the economies in the EBRD regions as well as globally. In 2023, growth in the EBRD regions is expected to pick up to 5 per cent. Projections are subject to an exceptionally high degree of uncertainty, including major downside risks should hostilities escalate or should exports of gas or other commodities from Russia become restricted."

Central Asia and the Caucasus may be additionally impacted by restrictions on convertibility of the Russian rouble and reduced air links between Russia and neighbouring economies which weigh on remittances and trade. Remittances from Russia amounted to 5 to 30 per cent of GDP in Armenia, the Kyrgyz Republic, Tajikistan and Uzbekistan. In addition, Russian tourist spending in Armenia, Cyprus, Estonia, Georgia and Montenegro used to range between 1 and 2 per cent of GDP – in the short term, only part of this deficit is expected to be offset by visitors from elsewhere.

The material is prepared by the EBRD in English language. Click here to access the full version.

Source: EBRD

Illustration: EBRD