MOSCOW, Nov 6 (Reuters) - Economies in Central Asia and the Caucasus will average growth of 4.2 percent annually in coming years, less than half the rate seen in the early 2000s, and need to redouble reform efforts, the International Monetary Fund said on Tuesday.
The IMF called on the former Soviet republics, in particular, to reduce the state’s role in their economies, and warned that escalating global trade tensions posed a significant risk.
“At this pace, it will take the region nearly two decades to reach the per capita income levels of emerging Europe,” the Fund said in a report on Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan.
Although half of those countries are net energy importers or marginal energy exporters, economies such as Kyrgyzstan Tajikistan and Uzbekistan are heavily dependent on major oil exporter Russia where millions of Central Asian migrant labourers work.
“There was good recovery in the past year and this year following external shocks from low oil prices... (but) governments should not think that the recovery will strengthen because we think we have seen the peak of the recovery and growth will be fairly steady,” Juha Kahkonen, deputy director of the IMF’s Middle East and Central Asia Department, said.
“Higher oil prices should not lull governments into thinking they can relax.”
Kahkonen also said Tajikistan, the poorest country in the region, could secure a deal with the IMF within months, after years of talks. An agreement would be good news for the holders of Tajikistan’s debut Eurobond issued last year.
“Good progress was made and certainly it is possible that there will be an IMF programme with Tajikistan in coming months,” he said. (Reporting by Olzhas Auyezov; Editing by Susan Fenton)