Page 54 - bne IntelliNews monthly magazine December 2024

54 I Eurasia bne December 2024
Selected ex-USSR countries: Manufacturing
detrimental to the local economies and have been eschewed by all the members of the CIS. Ironically, the sanctions regime on Russia is the reason why the CIS countries are flourishing.
This regional economic outperformance has been propelled by Russia’s own surprisingly strong growth. “After
a brief GDP contraction in 2022,
Russia returned to growth with fiscal stimuli and monetary easing,” Oxford Economics reports. Russia’s economy grew by 3.6% in 2023, with an estimated similar growth rate this year. With domestic demand surging, bolstered
by state-backed lending, demand for labour remains high, supporting remittance-dependent economies such as Tajikistan and Kyrgyzstan in particular.
As bne IntelliNews reported Central Asia has been the big winner from the war in Ukraine, acting as a bridge between trading blocs. EBRD analysts note that Central Asia is maintaining robust trade ties with competing economic powers, benefiting from enhanced
FDI flows largely tied to logistics and trade services. In particular, Kyrgyzstan has taken the war-time windfall and
is investing into the massive new Kambarata-1 HPP hydropower plant that will turn the mountainous republic into a net power exporter and provide the government with a new source of income, but like the other ‘Stans is also enjoying a manufacturing boom.
Industrial output
Key sectors in the CIS are benefiting from the effects of redirected FDI and rising exports to Russia, Oxford Economics data reveal. Belarus, Armenia and Uzbekistan have all registered notable gains in industrial production, which, according to analysts, reflects “the earlier influx of FDI and a rise in exports to Russia.”
While formally direct trade ties between the EU and Russia have been cut
and are currently at a 25-year low, in practice many private Western firms
are simply redirecting their trade via third countries. Exports of EU products to countries like Armenia, Kyrgyzstan
Selected ex-USSR countries: Growth in IT and telecommunications
CPI inflation
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