"Following stronger-than-expected growth in 2024, the Commonwealth of Independent States (CIS) region is projected to experience an economic slowdown in 2025," says the United Nations (UN) report titled "World Economic Situation and Prospects 2025", APA-Economics reports.
The report notes that the aggregate GDP of the CIS and Georgia, which expanded by 4.5 per cent in 2024, is projected to increase by only 2.5 per cent in 2025. This slowdown reflects weaker growth in the Russian Federation and the diminishing impact of intermediary trade with the Russian economy for smaller CIS countries.
The regional outlook hinges on several factors, including a potential resolution to the war in Ukraine, possible changes in the sanction regime against the Russian Federation, the evolution of energy and commodity prices, and developments in major economies like China.
The Russian economy is projected to grow by only 1.5 per cent in 2025 as labour shortages and tight monetary policy take a toll. Lower oil prices weigh on the region’s energy exporters, putting fiscal spending plans at risk.
Ukraine’s economic prospects remain heavily dependent on military developments, the functioning of the Black Sea corridor, and international funding flows. The estimated cost of post-conflict reconstruction in Ukraine has been revised up to $524 billion.
15 Central Asian countries may sustain high growth rates, supported by strong consumption and investment. In South-Eastern Europe, regional GDP growth is projected to moderate from 3.4 per cent in 2024 to 3.2 per cent in 2025. Weaker external demand and political instability remain key risks.
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