The latest edition of the World Bank Economic Update for the Europe and Central Asia region released on October 7, 2020 shows that Central Asian economies are on course to contract by 1.7 percent this year, a sharp reversal from the 4.9 percent growth in 2019.
According to the recent report, the impact of the coronavirus (COVID-19) pandemic varies across Central Asia. Kazakhstan and the Kyrgyz Republic are expected to see an economic contraction of 2.5 percent and 5.5 percent, respectively this year.
Tajikistan and Uzbekistan, on the other hand, the report reveals, will avoid a recession but growth is likely to be at 1.6 percent, far below the 7.5 percent recorded in 2019 in Tajikistan and 0.6 percent in Uzbekistan having declined from 5.6 percent in 2019.
“The pandemic-induced contraction in 2020 is also expected to increase poverty in all countries of Central Asia. At the $3.20 per day poverty line, estimates suggest that an additional 1.4 million people may slip into poverty. At the $5.50 per day poverty line, customarily used in upper-middle-income countries (such as Kazakhstan), the increase in poverty could be over 1.8 million people. and, in the worst-case scenario, over 2.6 million could become poor in the region”.
In Central Asia, the World Bank projects growth to recover to 3.1 percent in 2021, supported by a modest rise in commodity prices and Foreign Direct Investment as the region deepens its integration with China’s Belt and Road Initiative.
However, the World Bank stated that the outlook remains highly uncertain as the region continues to grapple with negative spill overs from the Euro Area, Russia, and China through trade, commodity, and remittance channels. As a result, the downside scenario for Central Asia projects a 1.5 percent growth in 2021.
The pace of recovery, the Bank said will “also depend on the duration of the pandemic, the availability and distribution of a vaccine, global demand for commodities and the degree of improvement in global trade and investment”.
Furthermore, the World Bank indicated that “the report reconfirms that COVID-19 has deeply strained already-weak health care systems in the Central Asia states.
“It also shows that across Central Asia, more than 16 percent of the population is obese, nearly 12 percent of people are heavy episodic drinkers, and almost 18 percent are current smokers.
“Prevalence of these risks increases not only the likelihood of conditions such as cardiovascular disease, but also the mortality and morbidity consequences of infectious diseases like COVID-19”.
The recent report also outlined the deleterious effects of the current pandemic on the education and learning as well as reading due to the closure of schools.
“The pandemic has also adversely affected education and learning in Central Asia, threatening economic losses of $44 billion. School closures may lead to learning losses equivalent to one-third to one full year of schooling, and they are likely to exacerbate inequalities, by disproportionately affecting students from disadvantaged backgrounds.
“In Central Asia, the gap in reading between students from the richest and the poorest households is expected to increase by between 8 and 30 percent. Given the demographic composition of Central Asia, where young people make up over half of the population, the current education crisis will have long-lasting negative consequences”.
“The World Bank cannot emphasize enough the need for Central Asian countries to focus on improving access to quality education for all students, as well as on recovering learning losses that threaten to keep an entire generation from achieving their potential,” said Lilia Burunciuc, World Bank Country Director for Central Asia Region.
