CAREC Institute’s Quarterly Economic Monitor No. 16
The CAREC Institute published its latest “Quarterly Economic Monitor (QEM)” in April. The data show that in most CAREC economies, GDP growth accelerated further in 2024 from strong growth in 2023, with services being the most dynamic growth driver. International Financial Institutions expect a slight slowdown in real GDP growth for most CAREC economies in 2025 and 2026, but for most CAREC economies to remain above 4-5% year-on-year.
Inflation generally reaccelerated in late 2024 and early 2025, prompting more cautious monetary policies. This was not the case, however, in Pakistan, Uzbekistan, and the People’s Republic of China. Exchange rates (except for the fixed regimes in Azerbaijan and Turkmenistan) slightly weakened against the USD. Adjusted for inflation, most currencies depreciated against the RUB and the EUR, whereas appreciating against the RMB.
Export growth was significantly impacted by commodity price fluctuations, with gold and copper prices rising, whereas prices of fossil fuels were on a downward trend. Overall, net-exporters saw their surpluses shrink, while the results for net-importers were mixed.
For the first time, the QEM dives into the main macroeconomic developments in 2024 and outlooks also by individual countries. And it provides chapters with specific topics:
- “Excursion I” discusses the impact of the global trade tensions on the CAREC region. With potentially severe consequences for the global economy – including commodity prices, exchange rates and more – forecast risks are high and negative consequences for the region can’t be excluded. However new opportunities are also emerging, requiring CAREC countries to adapt to both challenges and possibilities.
- “Excursion II” gives an overview of measures initiated by the Two Sessions in the PRC to accelerate growth.
- “Excursion III” discusses Turkmenistan’s progress at the background of Uzbekistan’s recent achievements towards WTO accession. Even though the WTO is partially dysfunctional currently, accession remains an important step for trade facilitation.
As usual, the QEM also gives an overview of news about CAREC cooperation initiatives and cross-border business activities, and greening and climate adaptation initiatives.
This new QEM should be an interesting reading.