ECONOMY: MF expects sharp reduction in Caucasus and Central Asia countries’ growth rate (panarmenian.net)

PanARMENIAN.Net/ At a conference held in Bishkek yesterday, organized by the National Bank of the Kyrgyz Republic and the IMF, senior officials from Armenia, Azerbaijan, Georgia, Kazakhstan, the Kyrgyz Republic, Tajikistan, and Turkmenistan, and from international financial institutions discussed the impact and policy implications of the global economic crisis.

Prime Minister Igor Chudinov of the Kyrgyz Republic noted in his opening remarks that the subject of the conference is important and timely. After the external price shocks, the Kyrgyz Republic, like other countries in the region, was confronted with the impact of the global financial crisis. Last year, it managed to maintain sustainable macroeconomic performance, but the outlook is getting more difficult, he said.

IMF Middle East and Central Asia Director Masood Ahmed also stressed that the international financial crisis and global economic slowdown would impact economic prospects for the countries of the Caucasus and Central Asia. The IMF expects a sharp reduction in the region's growth rate from 6 percent in 2008 to less than 2 percent in 2009, he added.

Conference participants agreed that the countries in the Caucasus and Central Asia region are increasingly being swept up by the spreading global crisis, with countries that are very reliant on Russia or have large external financing needs being hit hardest. Russia remains a key trading partner and a major source of remittances for most of the region, and the slowdown there is hurting growth via trade and remittance channels, spilling over to domestic demand. Returning migrant workers may create an additional burden. Commodity exporters in the region are suffering from the decline in global demand and the sharp drop in commodity prices, while those countries more closely integrated with international financial markets are experiencing serious financing constraints.

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