ArmInfo.The economic situation in the member states of the Eurasian Development Bank (EDB) has a multidirectional development. If the economies of Russia and Belarus, under the strong pressure of sanctions, experienced a decrease in business activity, then economic activity in Kazakhstan, Armenia and Kyrgyzstan, showed strong dynamics.
GDP growth in Tajikistan slowed down but remained positive. In general, according to the results of 5 months of the current year, the aggregate growth of GDP in the EDB region of operations is estimated by the Bank's analysts at 0.9% y/y. This is stated in the Macroeconomic Outlook published today, prepared by the Bank's analysts.
EDB analysts note that the phenomenon of the last months is due to the unprecedented appreciation of the Russian ruble against the major currencies. The ruble exchange rate was temporarily traded near the 50 level against the dollar in June, which has not been observed since 2015. The revaluation of the ruble is a consequence of the contraction of domestic business activity, foreign exchange restrictions and the forced abandonment of the fiscal rule. Imports to Russia have fallen by more than 40% since the beginning of the year and showed only slight signs of recovery in May. The measures taken to ease foreign exchange restrictions and the authorities' statements about possible interventions in the foreign exchange market led to the devaluation of the ruble from the beginning of July to 60-63 per dollar. It is still premature to talk about a stable trend of the ruble devaluation, since the fundamental factor of pressure on the ruble towards its revaluation in the form of a high trade surplus remains. Based on the baseline scenario, we expect the average exchange rate of the ruble against the dollar to be 62 in Q3and 70 in Q4.
"Another new phenomenon is connected with the revaluation of the Russian ruble against the dollar - a strong decorrelation between the dynamics of the national currencies of the states of the region in relation to the Russian ruble," said Yevgeny Vinokurov, Chief Economist of the EDB. Since the beginning of the year, the tenge has devalued against the ruble by more than 30%. A significant part of the devaluation took place in June. A similar trend is observed in Kyrgyzstan, where the som has stood at around 79.5 per dollar since the beginning of June, and has depreciated by 14% against the Russian ruble. The Belarusian ruble devalued against the Russian one by 17% in June, and by almost 40% since the beginning of the year. Armenian dram - devalued by 20% since the beginning of the year. All this can carry tangible and ambiguous consequences for economies that have yet to emerge'.
The devaluation against the ruble may lead to a decrease in the volume of imports of goods from Russia and become an additional pro-inflationary factor. On the other hand, goods supplied to Russia from these countries will become more competitive in price, which will support industrial and agricultural exporters. This is especially true for Belarus. And in the case of Kyrgyzstan and Armenia, this is an increase in the volume of remittances of labor migrants in the national currency, which can additionally support consumer demand.
