EBRD says Russia’s war on Ukraine has modest impact on Central Asia

Russian war in Ukraine has had a minor influence on Central Asia, with high oil and gas income, a boost in labor, capital, and remittance inflows, as well as benefits from trade with Russia and China. Inflation and debt service expenses still exist, though, says the European Bank for Reconstruction and Development (EBRD) says in its February update of Regional Economic Prospects forecasts.

Here is a passage from the report, devoted to the Central Asian region:

“Central Asia, on average, has seen a rather modest impact from Russia’s war on Ukraine. Kazakhstan and Turkmenistan are enjoying windfall oil and gas revenues on the back of elevated prices, while the Kyrgyz Republic, Tajikistan and Uzbekistan have seen significant increases in inflows of labour, capital and remittances.

With many Western companies exiting the Russian market and Russian ports being sanctioned, Central Asian economies are also seeing significant gains in trade with Russia and China, both by exporting own products (for instance, textiles and consumer electronics) and by providing transportation and re-exporting services.

Strong growth is likely to continue across the region in the short term, but all Central Asian economies face the challenges of inflation and high debt-service costs”.