The Eurasia Development Bank (EDB) on June 1 released its Macroeconomic Outlook for the Bank’s six member states.  Bank analysts anticipate that the region’s economies successful adaptation to the new environment will support their growth this year.  Positive growth rates are projected for all countries in the region and the highest growth rate is projected in Tajikistan – 7.9 percent.  

The EDB Macroeconomic Outlook for 2023–2025 summarizes economic developments in the Bank’s member nations in early 2023 and provides key macroeconomic projections for the region’s countries until the end of the year and for 2024–2025.

EDB analysts have reportedly continued to share their perspectives on the three major trends observed in the global economy and their impact on Eurasia: 1) a slowdown in inflation, which is still expected to remain higher than in the previous decade; 2) the conclusion of monetary tightening cycles in developed countries; and 3) weaker global economic growth.

The report notes that the external environment for Eurasian economies in 2023 will be characterized by high inflation in developed countries and subdued demand for the region’s exports.  

EDB economies are expected to exhibit high resilience to the adverse external economic environment in the medium term.  The Outlook for 2023 has been revised positively for all the Bank’s member states. The main factors driving this revision include the strong performance observed at the beginning of this year amid the relatively swift adaptation of the economies to changes in the operating environment in 2022 and the implementation of fiscal support measures in certain countries.   

The economies of Russia and Belarus are expected to resume growth in the first half of 2023. By the end of 2023, Russia’s GDP is projected to increase by 1% and Belarus’s GDP is projected to increase by 2.2 percent.  

EDB senior experts note that strong domestic demand and increased mutual trade will ensure high growth rates by the end of 2023 in other EDB member states: Armenia’s GDP is projected to increase by 7.5%, Kyrgyzstan’s GDP -- by 4.2%, and Tajikistan’s GDP -- by 7.9%.”

EDB analysts anticipate that aggregate inflation in the Bank’s region will decline to 6.4% by the end of 2023, compared to 12.4% in 2022. This slowdown in inflation reportedly can be attributed to the adjustment of the economies and a recovery from the shock experienced in early 2022, when there was a sharp increase in devaluation and inflation expectations.  Inflation is projected to be at 2.5% in Armenia, 7.8% in Belarus, 7.9% in Kazakhstan, 7.1% in Kyrgyzstan, 6.1% in Russia, and 6.6% in Tajikistan.  

The projected slowdown in inflation paves the way for central/national banks in most countries to reduce their key rates in the medium term.  

The baseline scenario does not anticipate any sustained deviation of the Russian ruble from its current values. The projected average RUB/USD exchange rate for 2023 is 77.4, with an expectation of reaching 79 by the end of the year.   

The Eurasian Development Bank is an international financial institution investing in Eurasia.  For more than eighteen years, the Bank has worked to strengthen and expand economic ties and foster comprehensive development in its member countries – Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan.  The EDB's charter capital totals US$7 billion.  Its portfolio mainly consists of projects with an integration effect in transport infrastructure, digital systems, green energy, agriculture, manufacturing, and mechanical engineering.  The Bank’s operations are guided by the UN Sustainable Development Goals and ESG principles.  The Eurasian Development Bank has observer status in the UN General Assembly.