Macroeconomic reports

In the first half of 2023, the Belarusian economy experienced a recovery growth. One of the main growth factors was the activation of domestic demand, supported by a noticeable increase in real wages, significantly outpacing labor productivity growth, and an acceleration in consumer lending. Inflation in the first half of 2023 continued to slow down under the influence of moderate inflation in the Russian Federation, the appreciation of the Belarusian ruble against the Russian ruble, and a decrease in inflation expectations in conditions of maintaining the price regulation system.

In the first half of 2023, the Armenian economy continued to be influenced by the positive externalities manifested in 2022. In January-June 2023, economic growth in the Republic of Armenia was supported by both external and domestic demand. Inflation slowed significantly amid the strengthening of the Armenian dram, lower prices in international commodity markets, the high base of the previous year and the impact of monetary policy tightening in 2022.

Economic growth in the Kyrgyz Republic slows down in the first half of 2023 due to a decline in gold production and a slowdown in agricultural output. Fixed capital investment and services remain the key drivers of economic growth. Inflation peaked in February 2023 amid high global commodity prices and transportation costs. In June 2023, consumer inflation slowed amid lower global food prices and the NBKR rate remaining high.

In the first half of 2023, Tajikistan's economy continued to demonstrate a high growth rate, with the main drivers being the services sector, agriculture and construction. Economic activity was also supported by high growth rates of remittances. The NBT reduced the refinancing rate in the context of reduced inflationary pressures, especially from the food commodities group. The increase in imports led to the formation of a deficit in the CA.

In 2022, the economic growth accelerated significantly in the Republic of Armenia, reaching 12.6%, that was mainly a result of a substantial expansion of domestic demand. Despite initial scepticism about the prospects for economic growth, actual developments in 2022 resulted in positive externalities for the RA economy through an increase in the number of tourists, the relocation of highly qualified specialists from Russia, expanded exports of goods and services, and an increase in remittances. Inflation accelerated to 8.3%, driven by high prices on international commodity markets and stronger domestic demand.

The negative impact of sanctions, along with high external background inflation, drove the economy of the Republic of Belarus into stagflation in 2022. Real GDP fell by 4.7%, while inflation accelerated to 12.8%. However, the macroeconomic performance in H2 is indicative of gradual adaptation of the Belarusian economy to the new environment. The GDP slump started to slow down. That was accompanied by significant deceleration of inflation, although it was partly achieved through tightened administrative price controls.

In 2022, Tajikistan's economy continued to show high rates of economic growth, driven mainly by domestic demand. Consumption was supported by high rates of growth of remittances. Investment growth occurred in the electric power generation, transmission and distribution sector, as well as in education. Higher remittances contributed to an improvement of the current account and the balance of payments in general, leading to increase of the country's international reserves and appreciation of the local currency. In turn, the local currency appreciation and a good harvest of agricultural crops contributed to lower inflation, which gave the National Bank of Tajikistan an opportunity to bring down the refinancing rate by the year end. In 2022, the budget deficit declined marginally

The economy of the Kyrgyz Republic has shown resistance to external shocks associated with the volatility of world energy and food prices, the disruption of transport and logistics chains, and the volatility of exchange rates of the national currencies of major trading partners against the background of an aggravated geopolitical crisis. The economic growth accelerated to 7.0% in 2022, due to increased gold production and the impact of new economic conditions on the economy. The migration of capital and people, mainly from the Russian Federation, had an impact on the growth of domestic demand, which put pressure on inflation. An additional factor contributing to higher domestic demand and inflation was a weaker fiscal position associated with higher government expenditures on labour and capital investment.

In the first half of 2022, the short-term indicator of economic activity in the main sectors of the Republic of Tajikistan amounted to 7.4%. A slight slowdown in the economic growth rate compared to the same period in 2021 (8.7%) was due to a decrease in the growth rates of services and construction. Remittances from abroad and external financing contributed to an increase in gold and foreign exchange reserves by 22.3% to cover 7.4 months of imports of goods and services. The budget deficit narrowed to 1.1% compared to 1.4% a year earlier, mainly due to the execution of budget expenditures below the planned level

In the first half of 2022, the KR economy grew by 6.3% amid an ongoing recovery in the aftermath of the COVID-19 pandemic, supported by fiscal stimulus and increased gold production. External shocks in March 2022 led to local currency depreciation and accelerated inflation.  Under these conditions, the NBKR had to implement a tighter monetary policy, as well as conduct foreign currency interventions to stabilize prices and the exchange rate. Significant growth of tax revenues generated a state budget surplus of 1.4% of GDP in the first half of 2022