According to the Eurasian Development Bank (EDB) analysts, the economic dynamics in the second half of the year could be significantly affected by deteriorations in the external environment.

The Monthly Macroeconomic Review released on August 11 notes that the probability of a recession in the eurozone and the US is high, although such a recession is expected to be shallow.  Nevertheless, it will have a short-term negative impact on the global demand for the region’s exports, according to the survey.

The strengthening of the Russian ruble in June and July reportedly proved to be quite significant.  However, it is highly probable that its abnormal appreciation is already behind. In the previous Macroeconomic Review, EDB analysts estimated that the strengthening of the ruble could have negative consequences for the Russian economy.  In the second half of the year, the ruble is projected to move towards more comfortable rates for the budget and exporters.  The intensity of this movement will depend in the first place on the recovery of import demand.

“An interesting observation is that the second quarter of 2022 saw a surge in individual remittances within the region.  For eg, when Armenia, renewed its absolute high for the second month in a row – in June and May it received US$452 million and US$266 million in individual remittances from Russia, respectively, while in 2021 the monthly average was US$72 million.  Remittances from Russia to Kyrgyzstan recovered their growth as early as April, at 14% year-on-year after a 33% year-on-year decline in March.  This growth was due to the combination of two factors - the strengthening of the ruble against the dollar and the movement of more people between countries in the region.  The second quarter also demonstrated the highest quarterly inflow of migrant workers to Russia over the last six years.  This year’s significant growth in remittances is a significant factor supporting the region’s economies,” said Evgeny Vinokurov, Chief Economist at the EDB.