ArmInfo. Analysts of the Eurasian Development Bank (EDB) presented the first in this year macroeconomic review. Thus, according to the EDB, economic activity in Armenia increased by 5.2% y-o-y in January-November. In November, growth accelerated to 13.2% y-o-y (3.8% in October). This was facilitated by increased dynamics in the services and industry sectors, maintaining a positive trajectory in construction and trade.
The volume of industrial production in Armenia increased by 15.7% y/y from 3.9% a month earlier due to the manufacturing industries, which supported exports (+42.1% y/y in November). The limiting factor is the decline in agricultural production.
Inflation in Armenia slowed down to 7.7% y/y in December from 9.6% y-y in November mainly due to the slowdown in the growth of prices for food and non-food products. The tightening of monetary conditions acts as a restraining factor for price growth. External pressure persists amid high world prices. If the current rate of slowdown in price growth is sustainable, we can expect inflation to return to the target range during 2022.
Meanwhile, inflation in Belarus at the end of 2021 amounted to 9.97% (in November - 10.34% y/y). The slowdown in inflation was facilitated by a decrease in the growth of administratively regulated prices - to 9% y/y in December from 9.8% and 10.7% y/y in November and October. Core inflation is not showing a sustained slowdown due to external price pressures, elevated inflation expectations, and the effects of a poor harvest. Monthly annualized growth of the core seasonally adjusted consumer price index is estimated by EDB to be above 9% in December, with an average level of 9.8% in 2021. EDB expects consumer price growth in the first quarter to be around 10% y/y and may slow down if weakened external price pressure. Regulatory measures may be needed to reduce inflation. EDB analysts record a slowdown in economic activity in Kazakhstan in January will be leveled in the shortest possible time. Prior to the January events, business activity was expanding: the cumulative PMI in December rose to 51.6 points from 49.1 a month earlier. The improvement of the indicator was facilitated by the recovery of business activity in the services sector. The work of industrial enterprises was limited by transport delays and a shortage of raw materials. The EDB believes that Kazakhstan's GDP in 2022 will increase by about 4%.
According to their data, inflation in Kazakhstan in December 2021 amounted to 8.4% y/y (8.7% y/y a month earlier). The slowdown in inflation was facilitated by the weakening of price pressure in the food segment due to lower price growth on world markets. Pressure on prices remains from the costs of producers: the increase in prices for raw materials and materials persists for the 17th month in a row. According to EDB estimates, inflation will exceed the target of 4-6% for most of 2022. At the same time, Kyrgyzstan's GDP grew by 3.6% in 2021. Excluding production at the Kumtor mine, growth was 3.9% . The decisive contribution was made by industry (growth by 9%) and trade (growth in retail sales by 12.9%). The decline was observed in construction (minus 4.8%) and agriculture (minus 5%). We expect that these industries will return to growth this year, and by the end of 2022, the country's GDP will increase by 4.5%. At the same time, inflation in Kyrgyzstan slowed to 11.2% y/y in December 2021 from 12.3% y/y in November. The contribution to the dynamics of the cost of the basket of consumer goods is made by food - it has risen in price by 13.3% y/y. Non-food products increased in price by 9.7% y/y, tariffs for services to the population increased by 7.1% y/y. The EDB forecast assumes a slowdown in inflation to 7.0% by the end of the year. Inflation in Russia in December 2021 amounted to 8.39% y/y (8.4% y/y in November). Monthly annualized seasonally adjusted price growth is estimated by EDB to be less than 8% in December (about 10% in November). The slowdown in price growth is associated with a decrease in service inflation. Inflation slowed down to 12% in the food segment. Inflation of non-food products remains high - 9% (8.5% in November). In the first quarter, consumer price growth will remain above 8% y/y: the weakening of pro-inflationary factors may begin to manifest itself by the middle of the year. Taking into account the dynamics of inflation, the likelihood of a key rate increase is high.
