Business activity repeatedly declined in Kazakhstan and Kyrgyzstan in July due to the re-introduction of quarantine restrictions. The monthly macroeconomic report of the Eurasian Development Bank (EDB) says.
It is noted that the dynamics of economic activity of the EDB’s operations in the region was heterogeneous. This is primarily due to differences in the epidemiological situation. The situation in the foreign exchange markets of a number of member countries of the bank in August — early September was characterized by increased volatility.
«Amid increasing devaluation expectations in Belarus, the pressure on the domestic currency and deposit markets has increased. The rise in geopolitical tensions due to the heightened threat of tougher anti-Russian sanctions put pressure on the Russian ruble. Growth in regional risks could have influenced the dynamics of quotations of the national currencies of Armenia, Kazakhstan and Kyrgyzstan,» the bank’s economists note.
The baseline scenario of the EDB forecast assumes a consistent easing of quarantine restrictions in the countries of the region. This will create conditions for the recovery of economic activity.
«We expect a gradual revival of consumer and investment demand, supported by the government’s anti-crisis measures. Forecast risks remain elevated, as the development of the epidemiological situation remains uncertain, and the likelihood of increased geopolitical tensions remains. The latter can have a significant negative impact on the business climate in the region,» the EDB analysts team says.
