WB: rising food and energy prices make Armenia more vulnerable

PanARMENIAN.Net - Every country in the Emerging Europe and Central Asia (ECA) region is expected to grow in 2011, but some countries are vulnerable to rising food and energy prices, said the World Bank at a press briefing during the World Bank/IMF Spring Meetings 2011.

“Rising food and energy prices could push 5.3 million more people into poverty across Emerging Europe and Central Asia,” said Theodore Ahlers, Director of Strategy and Operations of the World Bank’s Europe and Central Asia region. “For most countries in the region growth returned in 2010, following sharp declines in 2008 and 2009. However, the region’s annual growth of around 4.5 percent was much lower than that of other regions in 2010, and projections for 2011–13 indicate only slightly stronger performance.”

Every country in the ECA region should record positive growth in 2011, however growth is more tepid in Central and Southeastern Europe than in the Commonwealth of Independent States (CIS), where high commodity prices have lifted net exports, increased remittance flows from migrants, and boosted private consumption, the World Bank Yerevan office told PanARMENIAN.Net Yet, higher food and energy prices are a source of vulnerability for net importers as these threaten to increase poverty, particularly in lower income economies in the CIS, and add more pressures to macroeconomic policy management across the region.

The global food and energy price increases represent an opportunity for commodity exporters. Large oil exporters Azerbaijan, Kazakhstan and Russia, which account for 15 percent of the world’s oil production, are benefiting from higher prices which are boosting growth, current account and fiscal balances. At the same time food and energy price inflation represents an additional source of vulnerability for many net importers, particularly Armenia, Georgia, Kyrgyz Republic, Moldova, and Tajikistan.