Voices from Europe & Central Asia
Syndicate content

October 2017

After the storm: Time to rebuild faster and stronger

Lilia Burunciuc's picture
Also available in: Русский
With every calamity comes an opportunity: to rebound and rebuild stronger than before. The economies of Central Asia faced such an opportunity following the major economic shock they experienced at the end of 2014. The collapse in commodity prices affected not only oil-producing countries – highlighting the narrow production base on which their prosperity rests – but also oil importers, whose growth depends largely on remittance-fueled demand.

All countries in the region experienced significant welfare losses. In 2015-16, the volume of imports declined 15% in both Tajikistan and Uzbekistan, and 25% in Kyrgyzstan – a clear sign that households and firms were constrained.

After the initial shock, however, the economies of Central Asia rebounded. This was thanks to supportive fiscal and monetary policies, namely fiscal expansion and relatively lose monetary policy. Growth has picked-up: for Central Asia, as a whole, it is now projected to reach 4.4% in 2017, against 2.8% the year before. Inflation has returned to manageable levels: in Kazakhstan, it has plummeted down from the double-digit rates seen after the fall in oil prices, confirming that the previous spike was merely a one-time adjustment.

But, have the countries of Central Asia done enough to shift the focus from structural constraints to durable prosperity? According to the recently released Economic Update for Europe and Central Asia, important challenges still lie ahead.

A Toast to Food: Looking for innovation in Croatia’s food industry

Also available in: Русский
Innovation in food may seem obscure. There are only so many ways you can cut a carrot and you cannot simply reinvent the pig. But in an increasingly busy and wealthy world, the nature of demand for food is changing and scope exists for innovation in the way we deliver food to match people’s lifestyles. With demand for such new segments rapidly growing across Europe, Croatia seems well-poised to exploit this trend.

So why aren’t more farmers and firms champing at the bit to get a piece of this economic pie?