Roberto Cardarelli: External stimuli for Central Asian economies proven more resilient than expected

Ongoing structural transformations and the influx of foreign capital are creating significant difficulties in forecasting the economic development of the Central Asian region, Assistant Director of the IMF's Middle East and Central Asia Department Roberto Cardarelli said during the presentation of the International Monetary Fund's regional economic outlook for the Middle East and Central Asia held in Uzbekistan, Report informs.

As the fund's representative emphasized, following the completion of first-generation reforms, Central Asian countries entered a sustainable growth trajectory, significantly accelerating the pace of catching-up development. However, the situation has changed drastically due to geopolitical shocks, he believes.

"Initial fears of analysts about the negative impact of the Russian-Ukrainian conflict on neighboring states have given way to the recording of unforeseen effects," the fund's representative said.

Cardarelli pointed out the defining role of the redistribution of trade flows, which has become a significant growth factor for a number of economies: "In addition, a significant influx of foreign investments, highly qualified specialists, and money transfers from abroad was registered. Despite that initially these impulses were regarded as purely short-term, some of them have acquired the character of long-term potential, noticeably activating credit and investment cycles in the construction industry and infrastructure sector."

The IMF representative emphasized that real credit growth rates in certain countries significantly exceeded double-digit values (especially in Kyrgyzstan and Tajikistan). In such circumstances, the systematic downward deviation of forecasts testifies to the objective difficulty of comprehensively accounting for the entire set of factors.

"I will not be surprised if in April next year we again need to adjust growth forecasts upwards," Cardarelli stated, adding that analysts need to find a balance between ongoing structural transformations and volatile external stimuli, which are demonstrating significantly greater resilience than previously expected.