«In recent years, resilience of the economies of the member countries of the Eurasian Development Bank (EDB) to the effects of external shocks has increased,» Alexey Kuznetsov, Head of the Economic Analysis Department of the EDB, stated to 24.kg news agency on the sidelines of the Eurasian Economic Integration conference.
According to him, the region of EDB operations is actively involved in international trade and transfer of financial assets. Openness of the economies of the region, integratedness of the largest countries in the global financial market determine a significant impact of external demand shocks on their economic development.
«According to our estimates, a decline in global growth of 0.7 percent per year, accompanied by increased global uncertainty and a decrease in investor interest in emerging market assets, could lead to a 0.3 percent reduction in the aggregate GDP of the EDB member countries. Influence will be carried out mainly through channels of foreign trade and financial flows. In Armenia, Kyrgyzstan and Tajikistan, the impact of global output reductions on domestic economic activity is intensified by the high importance of remittances from Russia,» Alexey Kuznetsov stressed.
He noted that commodities would continue to play an important role in the structure of export-import operations of the EDB member states. Therefore, economies remain vulnerable to fluctuations in world commodity markets, primarily of energy resources.
According to the bank, the GDP growth of the EDB member countries will slow down by 0.14 percent over the year in response to a short-term drop in oil prices by 10 percent.
«It should be noted that the resilience of the region’s economies to external shocks has increased significantly in recent years. This is largely due to the implementation of a balanced domestic economic policy, including the operation of budget rules and increased flexibility of exchange rate formation,» Alexey Kuznetsov said.
