London, Feb. 16, (dpa/GNA) - Russia’s invasion of Ukraine a year ago and the Western sanctions imposed in response have fed economic growth in some regions, the European Bank for Reconstruction and Development (EBRD) said in a report published on Thursday.
Economies in Central Asia and the Caucasus have benefited from intermediate trade to Russia as well as capital inflows and educated migrants from Russia, the bank said.
Real wages have risen – in contrast to other regions – and imports from the EU, the US and Britain have increased enormously, the EBRD noted. This indicates that goods were resold to Russia via the Caucasus or Central Asia.
This intermediate trade accounts for only a fraction of Russian imports from the West. But in countries like Kyrgyzstan or Armenia, it amounts to an annualized share of 4% to 6% of the gross domestic product.
A burgeoning logistics industry has emerged to facilitate this trade, contributing to capital inflows that have in turn underpinned the appreciation of local currencies against the US dollar, the EBRD added.
The bank was founded after the collapse of the Soviet Union in 1991 to support the successor states and other countries in Central and Eastern Europe on the path to a market economy. Today, the EBRD is represented in more than 30 countries there, as well as the Caucasus, Central Asia, North Africa and the Middle East.
According to the report, economic output in the EBRD regions rose by an estimated 2.4% last year, significantly less than the 7.1% increase in 2021. This was due to the war in Ukraine and slowing momentum after the Covid-19 pandemic recovery.
Nevertheless, expectations were exceeded, the report said. Private savings accumulated during the pandemic were actively spent, especially in emerging Europe, boosting consumption.
For 2023, experts expect growth of 2.1%. High gas prices and persistent inflation weigh on the outlook. In 2024, the EBRD expects growth to return to 3.3%.
GNA