Page 14 - GEORptAug18

projected a slight slowdown for 2018, following the modest recoveries seen in 2017, due to waning returns on benefits that pushed expansion last year. These benefits include the knock-on effects of economic stabilisation in Russia, the region’s leading trade partner, as well as improving performances from the region’s hydrocarbons sector - mainly where Kazakhstan is concerned. The ADB’s latest outlook seems more optimistic, however.
“In Kazakhstan, Central Asia’s largest economy, growth picked up to 4.1% in Q1 of 2018 from 3.6% a year earlier. Growth was supported by an unexpectedly strong recovery in industry, with improvements in mining driven by rising prices and volumes for oil and metals, and in manufacturing by a government industrialization program,” the ADB noted. “In the first 5 months of 2018, industry expanded by 5.4%.”
The bank also mentioned that real income rebounded by 1.2% in January-April 2018 after a prolonged downward trend observed since mid-2016. As such, the ADB expects growth in Kazakhstan to reach 3.7% in 2018 and 3.9% in 2019, above the earlier forecasts of 3.2% and 3.5%, respectively.
“Growth prospects are further improved by a government plan to introduce a new scheme for pension payments from July 2018 and to lower taxes on modest wages from January 2019, the ADB added. “As these initiatives target lower-income citizens, they are expected to stimulate future growth in private consumption.”
Among other countries in the region, Georgia recorded higher than expected growth in early 2018 thanks to contributions from tourism, exports and capital investment, the bank said.
Armenian growth accelerated further in the first quarter of 2018 due to strong domestic and external demand after experiencing a sharp rebound last year from nearly no growth in 2016, it maintained.
Growth in Azerbaijan saw an ongoing recovery in the first five months of 2018. It is expected to pick up further given the recent launch of the Shah Deniz II gas field in the Caspian Sea, from which gas will be sent by pipeline to Turkey and, eventually, Europe.
Rising oil prices and gas exports helped Turkmenistan’s “PRC supported growth in the first half of 2018, though the pace may moderate under curtailed public investment later this year”, the outlook projected.
The report also sees Uzbekistan’s growth slightly outpacing the 4.0% and 4.2% forecast in ADO 2018 to reach 4.2% in 2018 and 4.3% in 2019 as its economy grew robustly in the first quarter of 2018 driven by exports and investments that partly offset weaker consumption.
“Kyrgyzstan recorded modest growth in the first 5 months of 2018, most prominently caused by in lower output from the large Kumtor gold mine,” the bank said, referring to the major slowdown experienced in the tiny Central Asian nation.
“Tajikistan recorded robust growth in Q1 of 2018, and this trend is likely to continue against a background of recovery in the Russian Federation and improved ties with Uzbekistan, both key trading partners.
14 GEORGIA Country Report August 2018 www.intellinews.com