Remittances in Europe and Central Asia: between the Euro crisis and Russia’s growth prospects

The bifurcated trend continued in 2011

Bratislava, SLOVAKIA - 13 February 2012 - The bifurcated trends in remittances observed in 2010 seem to have continued in 2011. Preliminary central bank data from countries whose migrants work mostly in the Russian Federation, or with large diasporas in Russia, continue to indicate stronger growth in remittances this year than in countries whose migrants are mostly working in the Europe Union (new EU member states, Western Balkan economies). Whereas the former group has seen remittances growing by some 29 percent in 2011 (bright blue and yellow in chart 1), the latter group has recorded growth of about 7 percent (light blue and yellow in chart 1).

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The “Euro Crisis”: Implications for Wider Europe

Bratislava, SLOVAKIA - 24 January 2012 - Euro-pessimism has been a feature of the global financial crisis, particularly since Greece and Ireland’s fiscal meltdowns in 2009 and 2010 respectively. This was followed by the debt crises in Portugal, Ireland, Italy, Greece and Spain (the so called “PIIGS”), and most recently by the downgrade of the triple A sovereign debt qualifications of France and Austria by Standard & Poor’s on January 13^th 2012, bringing additional uncertainty to the eurozone. The fear of further repercussions on the other countries in the entire union is growing stronger. These are indeed trying times for the EU and constructing scenarios in which things worsen hardly requires the imagination of a novelist. However, some of this criticism is perhaps misguided as a recent presentation from the UNDP senior economist’s office in Bratislava suggests.

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Kyrgyzstan: Are two quarters of economic recovery and declining inflation improving households’ real income?

“Fast facts” from Kyrgyzstan’s official socio-economic data

Bishkek, KYRGYZSTAN – 11 January 2012 – The latest official data report a 8.5 percent GDP growth in Kyrgyzstan from January to November of 2011 over the same period a year ago. This trend points to a full recovery in GDP growth in 2011 after the decline experienced in 2010. The industrial sector continues to be one of its main drivers. During the period January-November 2011 industrial production increased by 24.1 percent on a year-on-year basis.

What’s driving the recovery?

The strong performance of the Kumtor gold-mining complex can explain some of the 2011 recovery. However latest data show that other factors contributed to this result. Declining inflation in the second half of 2011 eased the recovery process. As a matter of fact, growth in GDP and industrial output during 11 months of 2011 would be 6.6 and 19 percent respectively, if production of Kumtor gold mining complexwere to be excluded. The rapid growth in manufacturing, which increased by 24.9 percent in January- November 2011, and the 20.9 percent growth in production and distribution of electricity, water and gas strongly supported economic recovery in 2011.

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Has Belarus’s currency crisis bottomed out?

“Fast facts” from Belarus’s official socio-economic data

Minsk, BELARUS –3 January 2012- The sharp depreciation of the Belarusian rubel, which began in May (Chart 1), may have bottomed out. Following the 20 October decision by the National Bank of Belarus to unify the exchange rate (by allowing the official exchange rate to fall to the market rate), the December data indicate that the ruble was appreciating in nominal terms at the end of the year (Chart 2). Should this trend continue, it would suggest that the inflationary pressures, which sharply reduced living standards during the second half of last year, may start to abate soon.

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