The Eurasian Development Bank (EDB) in its recently published Macroeconomic Review said it expects Kazakhstan’s economic growth to come in at 4% in 2021. 

The development bank projects the aggregated GDP growth rate of its member states at 3.3%, after a 3% contraction in 2020. The EDB attributes its expectations to the easing of social distancing measures amid the coronavirus pandemic and an improvement of external economic conditions.

The EDB also expects Kyrgyzstan’s economic recovery to be completed by 2022 due to the depth of Kyrgyzstan’s economic recession in 2020 and its smaller fiscal capacity. Kyrgyzstan and Tajikistan are expected to receive additional support from recoveries in remittances in 2021. The bank forecasts Kyrgyz growth at 3.9% and Tajik growth at 6.1% in 2021.

“The EDB expects its member countries’ currencies to stabilise against the U.S. dollar in 2021. At the beginning of this year, currencies of countries in the EDB region of operations remain relatively stable vs. the US dollar. The national currencies are supported by rising oil prices. At the same time, the Russian rouble continues to be affected by geopolitical risks, which limits the room for its strengthening,” the EDB said in a statement accompanying the Macroeconomic Review.

In 2021, the average exchange rate of the Kazakhstani tenge (KZT) against the dollar is expected at 421.6, the Kyrgyz som (KGS) at 84.9 and the Tajik somoni (TJS) at 11.5.

“For the Eurasian region, which supplies raw materials to the global market, the rise in prices for metals and energy is generally positive, the review says. Export earnings are on the rise, government revenues are growing, and economic sentiment is improving. These positive effects are primarily observed in Russia and Kazakhstan,” the EDB added.

“First, the EDB member economies have adapted to operate in a pandemic environment. Second, in 2021 the Bank’s member economies are expected to recover strongly. The aggregated GDP growth rate of the EDB member countries is projected at 3.3%,” Ruslan Dalenov, chairman of the EDB management board, said. “The EDB member economies will grow even if the risky scenario takes place. Third, with the growing budget deficits to finance active support measures, the public debt of the EDB member states increased by US $45.4 billion. Debt parameters remain fairly stable. That said, at the end of 2020, Russia and Kazakhstan’s public debts amounted to about 18% and 30% of their GDPs, respectively.”