World Bank assesses economic risks and prospects for Central Asia

World Bank assesses economic risks and prospects for Central Asia

The World Bank experts made an analysis of the impact of COVID-19 pandemic on Central Asian countries and summed up how it will affect the further development of the region’s economies.

World Bank Regional Director for Central Asia Lilia Burunciuc stated that the recovery process will take time.

“The global pandemic was the most powerful shock and led to a sharp decline in the entire global economy. According to our baseline outlook, the global GDP is forecasted to decrease by 5.2 percent in 2020. The Central Asian regional economy is expected to contract by 1.7 percent. This decline in the global economy will become the deepest over many decades and even centuries,” Burunciuc noted during an online press briefing.

The World Bank experts predict the growth of the economies of Central Asian countries in 2021, if only the COVID-19 pandemic will not have a new wave. How the countries of Central Asia and the rest of the world will develop in the future is determined by what measures are being taken in order to prevent the second coronavirus wave and how those measures are being implemented.

“In most of the emerging market economies and developing countries, the crisis will have very serious consequences. It will have long-term negative consequences for labor productivity and potential output. Of course, those countries whose economies are significantly connected with other countries by trade and financial ties and with the global economy will be the most severely affected. It also includes the countries where the remittances play an important role, which is typical for Central Asian countries,” added Burunciuc.

Experts say that it is important to use the crisis to create new opportunities for innovation, and Kazakhstan has already done this.

“I think that the current situation, created by the global pandemic, provides an opportunity for innovation. For example, the World Bank supported a project in Kazakhstan developed by Kazakh scientists to conduct lung x-rays using digital analysis that can detect the novel coronavirus,” emphasized Burunciuc.

She also added that there are many other innovations that are relevant today. The World Bank intends to support several such projects in Central Asia.

The World Bank experts concluded that in order for the economies of Central Asian countries to recover as quickly as possible, their priority strategic task at this stage should be mitigating the effects of the global pandemic for the population, as well as the measures aimed at reducing economic damage, in the very near future. It is also very important to implement necessary reforms that will contribute to the improvement of the investment climate and support the conditions in which the business and the private sector will be able to continue their work.