YEREVAN, May 30, /ARKA/. According to the Macroeconomic Outlook for 2022–2024 released by the Eurasian Development Bank (EDB), higher inflation reported in the bank’s region of operations in March and April 2022 will remain elevated in 2023.
It says by the end of this year, consumer price growth will accelerate to a maximum of 16% and 18% in Russia and Belarus, respectively. The main factors are supply chain disruptions, greater volatility of national currencies, higher devaluation and inflationary expectations, and rising commodity prices.
In the countries that are not directly affected by the restrictions, the inflation surge by the end of 2022 will be smaller: 8.6% in Armenia, 13.2% in Kazakhstan, 15.3% in the Kyrgyz Republic, and 11.4% in Tajikistan, it says.
EDB analysts believe that monetary conditions in 2022 will be determined by a balance of fighting inflation and supporting economic activity. By the end of the year, the key rates could fall to around 9% in Russia (from 11% in May) and 12% in Kazakhstan (from the current 14%).
As inflation slows down, the key rates in Russia and Kazakhstan are expected to decrease actively in 2023 and return to single-digit levels.
Yevgeny Vinokurov, EDB Chief Economist, commented: “The risk of inflation in developed countries accelerating above 10% remains significant. Should hydrocarbon and food-related risks materialize, this could cause further increases in global inflation and trigger a global recession in early 2023. The economic downturn in such an adverse scenario would be small, but the recovery could be long and difficult.” -0-
