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Macrofinancial Developments and Systemic Change in CIS Central Asia from 2009 to 2014



CIS Central Asia’s structural heterogeneity may have deepened since the global crisis of 2008–09. Kazakhstan and Turkmenistan are relatively rich oil and gas exporters, the Kyrgyz Republic and Tajikistan are poor energy importers, and Uzbekistan is a more diversified but still rather poor economy. The rich hydrocarbon exporters typically achieve “twin surpluses” (current account and budget), while the hydrocarbon importers are often saddled with “twin deficits,” but benefit from remittance inflows. In contrast to the poorer countries, the energy exporters tend to attract large amounts of FDI and have carried out generous infrastructure modernization programs. Per capita income growth of the rich and the poor countries has diverged in recent years. No recession had occurred in Central Asia in 2009 and mostly robust GDP growth has ensued since. Growth drivers have been: recovering energy and other resource prices and/or export volumes, generous private and public investment expenditures, and substantial remittances. Fixed exchange rates (to the U.S. dollar) tend to be opted for by the oil and gas countries, floating currencies are preferred by the others. While price stability policies vary and inflation rates have on average come down to below double digits, price levels remain strongly exposed to volatile international food and staples markets. Banking sectors are fragile across the region; they are either recovering from a legacy of collapsed credit booms or suffering from high nonperforming loans as a result of connected lending or they require periodic subsidies for performing quasi-fiscal activities.

Suggested Citation

  • Stephan Barisitz, 2014. "Macrofinancial Developments and Systemic Change in CIS Central Asia from 2009 to 2014," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 3, pages 48-73.
  • Handle: RePEc:onb:oenbfi:y:2014:i:3:b:3

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    State-led economy; structural reforms; heterogeneity; monetary policy; convertibility; exchange rate regime; banking; quasi-fiscal functions; Central Asia; Kazakhstan; Kyrgyzstan; Tajikistan; Turkmenistan; Uzbekistan;

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • P34 - Economic Systems - - Socialist Institutions and Their Transitions - - - Finance


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