Central Asia

RGE's Q1 2010 Commonwealth of Independant States Outlook

The CIS (ex Russia) is expected to post a sluggish recovery of 3% in 2010, after lower commodity prices, reduced remittances and tighter global credit led to growth slowdowns throughout the region in 2009. These factors also narrowed the current account surpluses while tipping some into a deficit. The region’s heavy dependence on foreign financing exacerbated the economic situation as capital dried up while Russia’s sharp recession was transmitted throughout the region through lower remittances, investment and trade. Similarly, a sluggish and externally driven Russian recovery in 2010 will restrain regional growth.  IMF funds helped the most afflicted countries avoid significant budget cuts and balance of payments pressures. Azerbaijan and Uzbekistan, relatively closed economies, were the best performers in the CIS, maintaining large external surpluses in 2009 despite their slower pace of growth. By contrast, Kazakhstan and Ukraine, with exposed financial sectors, experienced negative growth (a very sharp double digit contraction in Ukraine’s case).

Read the Q1 2010 CIS Outlook.