MINSK (EDB press service) — Combined GDP of the Eurasian Development Bank (EDB) member-countries fell by 3% in 2020 with the growth of 2.3% in the previous period.

According to the EDB, economic activity declined in all countries except Tajikistan where growth slowed down significantly.

Weakening domestic and external demand, falling energy prices, deteriorating business sentiment, and transport restrictions have all contributed to the drop in business activity.

According to EDB analysts, government support measures for households and businesses have prevented major disruptions in the region. Unemployment rates in most member states remained moderate in 2020 and declined in late 2020 and early 2021.

The EDB report says:

Economic growth rates in most countries of the region have declined by 0.5-1% from pre-pandemic levels. This occurred in the context of the pandemic’s negative impact on investment, innovation and labour forces. Implementation of government development programmes may now become a key factor in restoring GDP growth rates in the countries of the region in the medium term.

Services suffered large losses, but retain the potential for a strong recovery as restrictive measures are relaxed.

Mining output has fallen due to lower global demand, falling hydrocarbon prices and the OPEC+ agreement to reduce oil production. Nevertheless, a gradual strengthening of demand and improved market conditions would help the extractive industries recover in the medium term, the EDB forecasts.

In addition, the manufacturing industry in most countries of the region has adapted to the challenges of the COVID-19 pandemic. Food production, chemical production, pharmaceuticals, machinery and electrical equipment production showed growth momentum.

A deep recession in the transport sector was caused by problems in supply chains and restrictions on cross-border movements.