This year growth is expected to pick up and the data from 1H19 suggests a better performance than the 4% expected by the Economy Ministry. GDP grew by 5.6% in 1Q19 and by 6.4% in 2Q19. It is, therefore, very likely we will upgrade our forecast for this year when we see the 3Q19 results. The decline in 2020 is more because of the base-effect from this year and the fact that little new investment is expected in either extractive industries or other sectors of the economy.
GDP expanded 7.3% YoY in the January-April period and well ahead of the expectations for the full year. Growth is expected to slow in the second-half of this year, as budget pressures will mean a slowdown in state spending. It should also be noted that the headline macro data is often unreliable and one is better served looking at anecdotal economic data and the sub-series data.
The pace of economic and social reform continues at the pace set by President Mirziyoyev soon after his election. To some extent, the easy steps have been taken, and resultant changes are working. Now the government effort is focused on privatizations and on expanding investor interest in sectors targeted to create economic and export diversification.
New methodology. The government has adopted international standards for macro data collection and reporting. It means that the recent series (from 2017) bears little relationship to the unreliable historic trends.
Growth. GDP is expected to grow close to 5% per annum for several years. The main drivers are the increase in investment spending, including strong growth in FDI, budget spending and rising incomes.
Growth. GDP is expected to have expanded by 3.1% in 2018. Household consumption and agriculture have been big contributors while the restrictions on trade and power from the conflict in Donbass have held back growth. This year’s growth is expected to be a little less due to the elections.
Monetary. Inflation rose to 8% in November because of the near 24% rise in gas prices (IMF requirement). The National Bank is still confident that it can get the rate back to 6% by end-2020. Because of the inflation spike, the NBU policy rate was increased to 18% in September. That should be a peak and fall this year. But the NBU will move cautiously and slowly.
Growth. GDP expanded by 6.2% in 2018, based on State guidance and data. However, official statistics are often incomplete and unreliable. They are more indicative of trend. That trend is for a slowing pace of growth over the medium term. The problem is that the country was too reliant on gas sales to China so when volumes and prices fell the country faced a crisis.
Growth. GDP growth is expected to have slowed a little last year, to 6% from 7.1% in 2017. But most agencies expect growth to stabilize at, or close to, 6% for several years. The key drivers currently are the volume of worker remittances (40% of GDP), mostly from Russia, and exports of electricity, cotton and aluminum. Longer-term, the country aims to significant boost electricity generation and exports, e.g. feeding in the CASA-1000 project, and by boosting value-added processing of cotton, gold and aluminum.
Growth. Growth in 2018 is expected to have been just over 6%. This was better than had been expected earlier in the year and is due to the surge in coal exports to China. Beijing had to cut coal imports from North Korea due to sanctions. The growth outlook for this year and for 2020 is similar.
Growth. Growth dipped in 2018 because of the over 30% drop in output from the Kumtor Gold Mine during the first half of the year. The two major contributors to GDP, and thus the swing factors for growth, are the output from Kumtor and remittances from Russia.
Growth. 2018 growth is expected to be close to 4.0% and not far off from that of 2017. The outlook for 2019 is slightly weaker growth because of the expected lower average oil price. Consumption and investment into manufacturing, agriculture and logistics are expected to be key drivers.