EAEU GDP growth rates slowed down by 1.6 times in 2019

According to the Department of Statistics of the Eurasian Economic Committee (EEC), the GDP of the Eurasian Economic Union (EAEU) countries grew by 1.4% in comparable prices over the past year. All main kinds of activities demonstrated growth. Passenger transportation, agriculture, and manufacturing showed the greatest growth.

At the same time, Armenia, which showed the highest growth, Kazakhstan and Kyrgyzstan, became the leaders by the GDP growth. The list is closed by Russia and Belarus, which demonstrated the worst result.

Note the decisive influence of Russia on the change in macroeconomic indicators in the EAEU as Russia's share exceeds 87% of the total EAEU GDP.

The main contribution to the change in the growth rates of the economies of all EAEU members was made by industrial production. This accelerated the GDP of Armenia and Kyrgyzstan. At the same time, the industrial production became the main reason for the slackening in the rate of economic growth in Belarus. Moreover, the main changes in manufacturing in all countries took place in the primary sector or primary processing sector.

Key socio-economic indicators for 2019

(in percentage terms as against the appropriate period of the previous year)

EAEU

Including

Armenia

Belarus

Kazakhstan

Kyrgyzstan

Russia

Gross Domestic Product

101.4

107.6

101.2

104.5

104.5

101.3

Industrial output

102.5

109.0

101.0

103.8

106.9

102.4

Agricultural production

103.4

96.02)

102.9

100.92)

102.62)

104.0

Capital investment

101.91)

104.41)

105.6

108.5

105.8

100.71)

Volume of performed construction works

101.5

104.3

100.1

112.9

100.6

100.6

Freight turnover

100.6

108.9

94.2

102.2

104.8

100.6

Passenger turnover

106.5

108.1

106.7

104.9

104.9

107.41)

Retail turnover

102.0

107.9

104.2

105.8

104.1

101.6

Consumer price index3)

103.3

100.7

104.7

105.4

103.1

103.0

Index of prices of manufacturers of industrial products3)

96.5

101.4

104.4

101.4

108.5

95.7

Source: EEC

1) January-September 2019 as against January-September 2018

2) Agriculture, forestry, and fishery

3) December 2019 as against December 2018

When estimating the GDP by the income-using method, then the main final consumption component is the final consumption expenditures. So, the EAEU member countries can be divided into two groups. There are Armenia and Kyrgyzstan where the final consumption is about 100% at the expense of the net import of goods and services, which is explained by the receipts to the country's economy from migrant workers. Russia, Belarus, and Kazakhstan have a more balanced GDP structure, including the net export of goods and services.

The EAEU industrial output amounted to USD 1.2 trillion in 2019 and grew by 2.5% in constant prices compared to 2018.

In 2019, the largest share in the structure of the EAEU industrial output was occupied by manufacturing, whose share was 63.1%. It has not changed since 2018.

In 2019, Belarus industrial output growth rates proved to be lower than the average growth rates of the EAEU, which is explained by the decline in the oil refining branch, especially in May-June as a result of "dirty oil."

In 2019, the agricultural output in the EAEU reached USD 120 billion and rose by 3.4%. First of all, it happened thanks to the low base of 2018. The main contribution to the growth of agricultural production was made by cereals.

Last year, the agricultural growth rates in Belarus slightly fell behind but, in general, followed the EAEU indicators. The expansive growth in July is explained by the low base of 2018 when the harvest was rescheduled for a month. The highest growth rates in agriculture in 2019 were shown by Russia.

In 2019, the capital investment growth rates slowed down in all EAEU countries, except Kyrgyzstan, and amounted to 101.9% over 9 months of last year compared to the same period of 2018. The total investment totaled USD 209.5 billion.

The main contribution to the slowdown in investment growth rates was made by the construction works. At the same time, the growth in housing construction is explained by the last year's low base, primarily in Russia.

The largest decrease in the growth rate of investments in equity was noted in Kazakhstan. The investment growth rates in Belarus equaled to 104.3% last year and were higher than the average ones in the EAEU. It was largely thanks to the active participation of the state in the economy, especially in housing construction.

In 2019, the freight turnover of all types of transportation in the EAEU made 6,416.9 billion ton-kilometers, which is 0.6% more than in 2018. The highest growth was demonstrated by road transportation, the freight turnover of which grew by 5.6%. The freight turnover reduced in water and air transportation.

The freight turnover fell in Belarus last year. It rose only in road transportation and significantly reduced in pipeline and rail transportation, primarily due to the ban on re-export of Russian oil products.

In 2019, the passenger turnover grew by 6.5%. It rose in the EAEU member states. The greatest growth was recorded in air transportation. Note that passenger turnover lowered in road transportation in Russia.

The retail turnover of the EAEU member states in 2019 equaled to USD 580.1 billion and went up by 2.0% compared to 2018. Thanks to the growth in wages, the retail trade growth rates in Belarus last year were above the EAEU average ones.

The consumer price index of goods and services totaled 103.3% in the EAEU in December 2019 compared to December 2018. Belarus with an indicator of 104.7% takes the second place in terms of inflation growth behind Kazakhstan.

The decrease in average annual oil prices last year led to a reduction in Russian foreign trade and, as a result, the EAEU foreign trade. The mutual trade was kept at the last year's level thanks to the preserved cooperation from the time of the Soviet Union.

The foreign trade in goods of the EAEU member states with non-EAEU countries amounted to USD 664.7 billion in January-November 2019, including export of goods – USD 416.9 billion, import – USD 247.8 billion. Compared to the same period of 2018, the foreign trade turnover decreased by 2.9%, export lowered by 6.3%, import rose by 3.4%. As a result, the foreign trade surplus totaled USD 169.1 billion versus USD 205.4 billion in 2018.

At the same time, Russia accounted for 83.6% of the total foreign trade in goods with non-EAEU countries, and Belarus accounted for 4.8% in 2019. Mineral products prevail in the commodity structure of export of EAEU member states to non-EAEU countries (66.3% of total exports). The largest share in import is occupied by machinery, equipment, and vehicles (44.3% of total imports), chemical products (19.3%), food products and agricultural raw materials (11%).

The volume of mutual trade in goods of the EAEU countries in 2019 amounted to USD 55.3 billion or 100.2% as against 2018. In the commodity structure of mutual trade of the EAEU countries, the largest share is held by mineral products (25.7%), supplies of machinery, equipment, and vehicles (19.8%), food products and agricultural raw materials (15.6%), as well as metals and metal products (12.9%).



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