CONSOLIDATED MACROECOMIC PERFORMANCE IN CENTRAL ASIA IN Q1’18
country GDP industrial output capital investments
Kazakhstan +4.1% +5.3% +2.3%
Uzbekistan +5.1% +11.8% +29.4%*)
Kyrgyzstan +1.35 -0.5% +2.3%
Tajikistan +7.0% +13.1% -5.6%
Russian Federation +1.3% +1.9% +2.6%
*) first 4 months of 2018
source: CIS Interstate Statistics Committee, Moscow
Figures presented in the first week of June by the Interstate statistics Committee of the Commonwealth of Independent States demonstrate that in terms of macroeconomic dynamics Uzbekistan has taken a firm lead over its fellow-ex-Soviet republics in Central Asia. Whether this is the outcome of President Mirzyoyev’s recent reforms in the political and economic arena of Uzbekistan or the result of a longer interactive process remains a matter of opinion – but here, numbers talk unambiguously.
Uzbekistan posted an increase in gross domestic product (GDP) of 5.1 per cent year-on-year in the first quarter of 2018, together with an 11.6 per cent increase in its industrial output. Capital investments in the country increase by close to 30 per cent over the period – promising further economic boosts if well-managed. On the socioeconomic side, inflation in Uzbekistan in the first three months stood at 5.8 per cent on-year. Between December 31 2017 and May 1 2018, industrial production costs went up by 1.4 per cent, indicating a decline in purchasing power if compared with inflation, since the bulk of production costs consist of wages in a country where most industries remain labour-intensive. In Uzbekistan, in the midst of industrial dynamics a substantial raise in living standards thus remain a persistent cause for concern.
Kazakhstan posted a positive-looking increase in GDP of 4.1 per cent through the first three months of the current year, against a 5.3 per cent industrial growth in the same period. In the first four months, industrial production costs and consumer prices increased by 2.4 and 2.2 per cent respectively.
In terms of macroeconomic stability, only Kyrgyzstan and Tajikistan show signs of alarm. Kyrgyzstan’s economic growth is but a shadow of the 7-per-cent-plus growth in GDP and industrial output it posted only a couple of years ago, and industrial output showed a net decline in the first quarter of this year.
In the first four months of this year, Kyrgyzstan witnessed a 1.3 per cent increase in GDP, offset by a 1 per cent decline in industrial output: away from the working place, back to the market place if translated in trends. Investments, however, went up by 3.5 per cent on-year, but putting all together the question remains how those investments are being managed. A hopeful sign in this context is that inflation remains below 1 per cent period-on-period while industrial production costs remain at 2.8 per cent on-year.
In Tajikistan, a firm increase in industrial output in the first three months was accompanied by a worrying decrease in capital investments – usually a warning sign of economic contraction coming up.
By comparison, the Russian Federation posted an on-year GDP increase of 1.3 per cent over the first quarter of this year, thereby putting an end to its previous economic mini-recession as a result of plummeting oil prices. Over the first four months of this year, industrial output increase by 1.8 per cent, thereby signaling further economic stabilisation in combination with a modest but reassuring increase of 3.6 per cent in capital investments. Accompanied by socioeconomic discipline in the form of increases in industrial production costs and consumer prices of 1.5 and 1.2 per cent respectively, Russia looks like an exemplary case of bubble-and-slump control, which is bound to have a positive impact on the economies of other CIS countries.
By Charles van der Leeuw, based on date by the CIS Interstate Statistics Committee, Moscow.