The International Monetary Fund published a global report on the world economic outlook. Global economic growth is expected to slow from 3.5% in 2022 to 2.9% in 2024, below the historical average of 3.8%. Advanced economies are predicted to decelerate from 2.6% in 2022 to 1.4% in 2024 due to policy tightening. Emerging markets and developing economies are expected to experience a slight decline from 4.1% in 2022 to 4.0% in 2024. Global inflation is forecasted to decrease from 8.7% in 2022 to 5.8% in 2024, aided by tighter monetary policy and lower international commodity prices. Core inflation is projected to decrease more gradually, with a return to target inflation expected around 2025 in most cases.
IMF Emerging Market and Developing Economies: Real GDP by Tawney Kruger
Uzbekistan
Uzbekistan showcases a positive trend in its Real GDP trajectory, having only a substantial dip during 2020, attributed to Covid-19, where the percentage lowered to 2%. The projections show a slight decrease in the country's Real GDP for the ongoing year, lowering to 5.5%, but stays the same for 2024 and 2028.
Kazakhstan
Kazakhstan's economy experienced troubles at the beginning of the period, dropping to 1% from 6.3% in 2015. Not long after, the Covid-19 stroke and the Real GDP of the country reached a negative number of -2.6%. Though it recovered by 2022, the projections show a steep decline in Kazakhstan's GDP, lowering to 3% in 2028 from 4.6% in 2023.
Kyrgyzstan
The country's Real GDP remained at steady levels between 3% and 5% until the pandemic, when it dropped to -7.1%. The projections show slight fluctuations reaching the highest in 2024 at 4.3% and reaching the lowest in 2023 at 3.4%.
Tajikistan
The real GDP of Tajikistan, as in the case with Kyrgyzstan, remained relatively stable, but at higher levels between 6% and 8%. The highest GDP of 4.4% during the pandemic belongs to Tajikistan. However, the projections for the country show a steady decrease from 2023 and on.
Turkmenistan
Turkmenistan's GDP remained relatively low during the whole period and reached its lowest point earlier than other Central Asian countries in 2019 at -3.4%. The projection for the country shows a negative trend, steadily reaching 1.9% by 2028.
Afghanistan
The country's GDP was at a high point of 9.1% in 2005-2014 but experienced a negative trend until 2021 which was the last year with available data. There are no projections on the future of the country's economy.
Monetary Policy
Although risks to the outlook are balanced due to decisive actions by Swiss and US authorities to control financial turbulence, they remain skewed to the downside, leaving limited room for policy errors. Monetary policy should continue its course to achieve target inflation, while fiscal consolidation is necessary to address rising debts. Structural reforms are crucial to boost medium-term growth in a constrained policy environment. Strengthened multilateral frameworks and adherence to international cooperation are vital for advancing the green transition, enhancing climate resilience, and ensuring food security for millions.
IMF Emerging Market and Developing Economies: Consumer Prices by Tawney Kruger
A consumer price index (CPI) is a metric that gauges the price changes in a weighted average selection of goods and services typically bought by households. It monitors shifts in prices over time. The CPI computation entails using a representative assortment of products and services, which is periodically updated to mirror changes in consumer spending patterns. Monthly, the prices of these items are collected from a sample of retail and service providers and are then adjusted to account for changes in quality or characteristics. Variations in the CPI serve as a way to monitor inflation trends over time and to make comparisons of inflation rates between different nations. While the CPI isn't flawless in measuring inflation or the cost of living, it remains a valuable tool for observing these essential economic indicators.
Uzbekistan
The CPI of Uzbekistan showed considerable fluctuations during the period, falling to 8.5% by 2016 and soaring to 17.5% during the Covid-19 era. The projection shows a steep decline over the years to 10% by 2028.
Kazakhstan
Kazakhstan experienced several lower points with one high in 2017, reaching 14.6%. The projection of CPI for the country shows even higher levels for 2023 and 2024 at 15%, but it is expected to fall to 9% by 2028.
Kyrgyzstan
The country showed the lowest rates of CPI among Central Asian countries during 2017-2020 and then the index skyrocketed to 11.9% in 2022. The projection shows a considerable decrease in CPI by 2028, at 8.6%.
Tajikistan
Tajikistan's index fluctuated between 9% and 3%, not showing any drastic changes over the years. The country's CPI is also expected to fluctuate during the projected period.
Turkmenistan
The country's index shows the highest spike during the period among CA countries, 19.5% in 2022, which is considerably different from 3.6% in 2017. During the projected period the CPI is shown to first fall to 5.9% in 2024 and then rise to 10.5% in 2028.
Afghanistan
In 2016, the country's CPI fell to negative levels of -0.7%, then steadily increasing to 5.2% by 2022. The projected period only shows a rise to 13.7% in 2023.
Global Inflation
In 2022, global inflation reached multi-decade highs, and though headline inflation has decreased, core inflation measures remain persistent. This prolonged high inflation could lead to persistently elevated inflation expectations, complicating central banks' efforts to return inflation to target levels. The role of near-term inflation expectations in inflation dynamics is increasing, and monetary policy is less effective when expectations are backward-looking. Improved monetary policy frameworks and communication strategies can help inform expectations, facilitating a quicker return to target inflation at a lower output cost.
Russia's Impact
Russia's invasion of Ukraine disrupted major commodity markets, potentially leading to further fragmentation due to geopolitical tensions. Commodity markets are particularly susceptible to fragmentation because of concentrated production and hard-to-substitute consumption. Such fragmentation would cause significant price swings and volatility. The impact of commodity trade disruptions would vary across countries, with low-income nations bearing a disproportionate economic burden due to their reliance on agricultural imports.
Fragmented minerals markets would make the energy transition more expensive, reducing investments in renewables and electric vehicles. International agreements like a green corridor agreement for critical minerals could safeguard the energy transition, and similar agreements for essential food commodities could stabilize agricultural markets, contributing to global climate and food security goals.
World Bank Projections
In comparison to projections of the World Bank, there are not any noticeable differences in the GDP growth of the region, which suggests the high probability of events unfolding according to these calculations.
Touching upon Uzbekistan's GDP in particular, the IMF report shows that in comparison to all other emerging economies, the real GDP of the country stands at the highest levels. However, the inflation levels are also higher than the average numbers in the report.
Written by Nigora Umarova
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