The Eurasian Development Bank's (EDB's) Macroeconomic Outlook for 2024 forecasts robust GDP growth across most of its six member states, with the strongest performance expected in Tajikistan and Armenia. 

Overall, the development bank expects growth in the region will come in at 3.4% in 2024, above the global economy, which is set to expand by around 3% in 2024. A report published at the end of June said that for the majority of EDB member nations, the economic forecast has been revised upward thanks to their strong performance early in the year and ongoing effective use of internal growth drivers. Supportive fiscal measures and structural reforms are creating favourable conditions for investment and consumer spending, the bank said. 

The strongest growth is expected in Tajikistan, at 8.0%, driven by strong domestic demand and export performance, followed by Armenia with 7.5% and Kyrgyzstan with 5.5%, both on the back of strong domestic demand and increased exports of basic metals.

Kazakhstan’s GDP is expected to expand by 5.0%, with government efforts to diversify the economy sustaining growth. 

The slowest growth in the region is expected in Russia at 3.0%. According to the EDB, growth will be bolstered by high household incomes and fiscal stimuli, though consumer activity may decline due to tight monetary policy.

Belarus’s growth is set to be slightly faster at 3.4%, supported by strong demand from Russia and wage increases.

Looking ahead to 2025 and 2026, growth is expected to remain strong in the three Central Asian economies, but to moderate in Armenia, Belarus and Russia. The bank expects Russia’s economy to grow by just 1.1% in 2025 and 1.6% in 2026. 

Inflation across the EDB region is expected to slow, with the aggregate rate decreasing to 5.8% by the end of 2024 from 7.2% in 2023. Inflation rates, however, vary: Armenia continues to experience low inflation, while Kyrgyzstan and Tajikistan may see inflation drop below target levels. In contrast, Russia and Kazakhstan face ongoing inflationary pressures, with rates projected to gradually approach targets: 1.5% in Armenia, 6% in Belarus, 8.3% in Kazakhstan, 4.3% in Kyrgyzstan, 5.8% in Russia, and 4.1% in Tajikistan.

This is in the context of a slowing rate of inflation decline in developed economies, attributed to labour market imbalances and rising costs from global economic fragmentation, which is expected to dampen their economic growth.

Despite declining inflation rates, the EDB's larger economies are expected to adopt a cautious approach to monetary easing. Kazakhstan’s base rate is projected to remain above 13% by the end of 2024, while the Central Bank of Russia is expected to start a cycle of rate cuts this year, aiming for an inflation rate decline to 15% per annum by year-end.