CCA economic growth slumps to 20-year low with more gloom ahead

05/05/2016

Central Asian migrant workersCCA economic growth: A combination of the large and sustained decline in commodity prices, the knock-on effect of Russia’s recession and the slowdown and rebalancing of China’s economy has brought economic growth in the Caucasus and Central Asia (CCA) region to a 20-year low, according to April’s Regional Economic Outlook for the Middle East and Central Asia from the IMF.
The external environment has continued to deteriorate since October 2015 from an already challenging position, says the report, with oil prices projected to average around $35 a barrel in 2016, $16 below the 2015 average. Russia’s economy is expected to contract by a further 1.75% this year, reducing trade, remittances, and investment to the region. And China’s slowdown is expected to weaken external demand and commodity prices further.
As a result of these external shocks, growth in the CCA region is projected to decline to 1.2% in 2016 and recover only modestly in 2017.