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UN: economic growth in CIS will weaken

08 June 2012 14:03 (UTC +04:00)

Baku. Victoria Dementieva â€“ APA-ECONOMICS. The economies of the Commonwealth of Independent States (CIS) are expected to see a mild slowdown in the outlook period. Output is projected to expand by 4.3 per cent on average in 2012, compared with 4.8 per cent in 2011, A report launched today 7 June entitled Â«World Economic Situation and Prospects (WESP) 2012 mid-year updateÂ» reported.

For major energy-exporters in the region, such as the Russian Federation and Kazakhstan, growth in 2011 was predominantly driven by higher commodity prices, especially oil and natural gas. Most other CIS economies, including those in Central Asia, also benefited from higher commodity prices and growth was further spurred by increased public infrastructure spending and worker remittances.

Inflation in the CIS countries is set to moderate in 2012, after accelerating in 2011 on the back of higher food and fuel prices, rising wages, and, in some cases, massive foreign exchange inflows. The slowdown in inflation will be beneficial for private consumption. In response to lower inflation, several central banks in the CIS cut policy rates in early 2012. The debt crisis in the euro area (especially in Greece) remains the biggest threat to the world economy.