IDEAS home Printed from https://ideas.repec.org/p/ris/eabrwp/2017_001.html
   My bibliography  Save this paper

Edb Countries: Targeting Lower Inflation

Author

Listed:
  • Yaroslav Lissovolik

    (Eurasian Development Bank)

  • Aleksei Kuznetsov

    (Eurasian Development Bank)

  • Aigul Berdigulova

    (Eurasian Development Bank)

Abstract

The beginning of the last year proved to be challenging for the EBD Member States: with oil prices plummeting, both financial markets and exchange rates were highly volatile. Nevertheless, as of the year’s end, the countries of the region saw exchange rates stabilize, and, in a number of cases, their national currencies strengthened considerably. Similarly, inflation in the EBD countries reached its historic minimum of 5.8% at the end of 2016 as compared to 12.8% in late 2015. In 2017, the most probable scenario is continued inertial recovery in the EDB Member States and inflation decreasing as external conditions stabilize. We project a 0.9% growth of the EDB economies, with a further 1.5% acceleration in 2018-2019. And there remain opportunities for reducing inflation that we expect to decrease from 5.8% at the end of 2016 to 4.7% in 2017. Limited demand, stabilized exchange rates and capital flows and a conservative monetary policy in most countries of the region will support the continued downward inflation trend. In 2017, the budget sector will be the main macroeconomic challenge for the EDB countries, given the growth in debt of the countries of the region (Belarus and Kazakhstan), reduced State budget reserves (the Russian Federation) and sizeable budget gaps in 2016 (Armenia and Kyrgyzstan). The oil output reduction agreement reached with the OPEC countries in 2016 was an important event for the region’s major economies and generated a considerable recovery of petroleum prices. The 2017 focus will now be on the OPEC countries’ ability to adhere to their quotas/obligations; historically, the OPEC countries have had great difficulty in observing discipline. Still, the agreement itself mitigates somewhat the risks of a sudden and large-scale fall of oil prices similar to their decline in late 2015 and early 2016. In the field of economic policy, the EAEU countries are just beginning to fully utilize, in the last few years, the potential of regionalism; for now, the agreement between the Eurasian Economic Union Member States and Vietnam, that took effect in 2016, can be recognized as one such achievement. Nevertheless, with the EAEU becoming more active internationally, 2017 may become the year of the EAEU’s breakthrough towards a more diversified system of trade alliances; here the Eurasian Economic Union’s negotiations with such countries as South Korea, Singapore and Israel will be of key importance.

Suggested Citation

  • Yaroslav Lissovolik & Aleksei Kuznetsov & Aigul Berdigulova, 2017. "Edb Countries: Targeting Lower Inflation," Working Papers 2017-1, Eurasian Development Bank, Chief Economist Group.
  • Handle: RePEc:ris:eabrwp:2017_001
    as

    Download full text from publisher

    File URL: https://eabr.org/upload/iblock/69c/macroreview.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Irwin, Douglas A. & Tervio, Marko, 2002. "Does trade raise income?: Evidence from the twentieth century," Journal of International Economics, Elsevier, vol. 58(1), pages 1-18, October.
    2. Alberto Behar & Anthony J. Venables, 2011. "Transport Costs and International Trade," Chapters, in: André de Palma & Robin Lindsey & Emile Quinet & Roger Vickerman (ed.), A Handbook of Transport Economics, chapter 5, Edward Elgar Publishing.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Huy Quang Doan, 2019. "Trade, Institutional Quality and Income: Empirical Evidence for Sub-Saharan Africa," Economies, MDPI, vol. 7(2), pages 1-23, May.
    2. Sebastian Garmann, 2018. "God save the queen, god save us all? Monarchies and institutional quality," Scottish Journal of Political Economy, Scottish Economic Society, vol. 65(2), pages 186-204, May.
    3. Reuven Glick & Alan M. Taylor, 2010. "Collateral Damage: Trade Disruption and the Economic Impact of War," The Review of Economics and Statistics, MIT Press, vol. 92(1), pages 102-127, February.
    4. Måns Söderbom & Francis Teal, 2003. "Openness and human capital as sources of productivity growth: An empirical investigation," CSAE Working Paper Series 2003-06, Centre for the Study of African Economies, University of Oxford.
    5. Eleanor Doyle & Inmaculada Martínez-Zarzoso, 2006. "Relating Productivity and Trade 1980-2000: A Chicken and Egg Analysis," Ibero America Institute for Econ. Research (IAI) Discussion Papers 147, Ibero-America Institute for Economic Research.
    6. Stephen T. Onifade & Ahmet Ay & Simplice A. Asongu & Festus V. Bekun, 2019. "Revisiting the Trade and Unemployment Nexus: Empirical Evidence from the Nigerian Economy," Working Papers 19/079, European Xtramile Centre of African Studies (EXCAS).
    7. Arjan Lejour & Vladimir Solanic & Paul Tang, 2009. "EU Accession and Income Growth: An Empirical Approach," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 16(1), pages 127-144, May.
    8. Miet Maertens & Liesbeth Colen & Johan F. M. Swinnen, 2011. "Globalisation and poverty in Senegal: a worst case scenario?," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 38(1), pages 31-54, March.
    9. GINSBURGH, Victor & MELITZ, Jacques & TOUBAL, Farid, 2014. "Foreign language learnings: An econometric analysis," LIDAM Discussion Papers CORE 2014049, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    10. Harald Badinger, 2008. "Cross-country evidence on the productivity effects of trade: the role of competition and country size," Applied Economics Letters, Taylor & Francis Journals, vol. 15(9), pages 671-675.
    11. Doko Tchatoka, Firmin & Dufour, Jean-Marie, 2020. "Exogeneity tests, incomplete models, weak identification and non-Gaussian distributions: Invariance and finite-sample distributional theory," Journal of Econometrics, Elsevier, vol. 218(2), pages 390-418.
    12. Badinger, Harald, 2008. "Trade policy and productivity," European Economic Review, Elsevier, vol. 52(5), pages 867-891, July.
    13. Lionel Fontagné & Gianluca Santoni, 2019. "Agglomeration economies and firm-level labor misallocation," Journal of Economic Geography, Oxford University Press, vol. 19(1), pages 251-272.
    14. Jacks, David S. & Novy, Dennis, 2018. "Market Potential and Global Growth over the Long Twentieth Century," Journal of International Economics, Elsevier, vol. 114(C), pages 221-237.
    15. Timothy Besley & Thiemo Fetzer & Hannes Mueller, 2015. "The Welfare Cost Of Lawlessness: Evidence From Somali Piracy," Journal of the European Economic Association, European Economic Association, vol. 13(2), pages 203-239, April.
    16. Lenaerts, Bert & Allroggen, Florian & Malina, Robert, 2021. "The economic impact of aviation: A review on the role of market access," Journal of Air Transport Management, Elsevier, vol. 91(C).
    17. Maria E. de Boyrie & Mordechai Kreinin, 2013. "Openness to Import and Productivity," Global Economy Journal (GEJ), World Scientific Publishing Co. Pte. Ltd., vol. 13(03n04), pages 319-331, December.
    18. Borsky, Stefan & Kalkschmied, Katja, 2019. "Corruption in space: A closer look at the world's subnations," European Journal of Political Economy, Elsevier, vol. 59(C), pages 400-422.
    19. Jeffrey Frankel & Andrew Rose, 2002. "An Estimate of the Effect of Common Currencies on Trade and Income," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(2), pages 437-466.
    20. T. Gries & M. Redlin, 2020. "Trade and economic development: global causality and development- and openness-related heterogeneity," International Economics and Economic Policy, Springer, vol. 17(4), pages 923-944, October.

    More about this item

    Keywords

    Macroeconomy; Forecasting; Eurasia; EAEU Countries; Economic Growth; Monetary Policy;
    All these keywords.

    JEL classification:

    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E66 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General Outlook and Conditions
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:eabrwp:2017_001. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Yaroslav Lissovolik (email available below). General contact details of provider: https://edirc.repec.org/data/ceedbru.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.