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Economies of Caucasus expect rebound in GDP growth, EBRD says

Economy Materials 18 February 2023 11:06 (UTC +04:00)
Economies of Caucasus expect rebound in GDP growth, EBRD says
Maryana Ahmadova
Maryana Ahmadova
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BAKU, Azerbaijan, February 18. The GDP growth in the Eastern Europe and the Caucasus in 2023 is forecast at 1.6 percent, Trend reports, citing the latest regional outlook from the European Bank for Reconstruction and Development (EBRD).

The bank has upgraded its projection for the region from September 2022 estimations (-4.6 percent).

At the same time, it is expected that an average economic growth in the Eastern Europe and the Caucasus in 2024 will stand at 3.2 percent.

According to the EBRD, the economies of the Caucasus saw a strong real wage growth, driven by intermediated trade and the associated logistics industry, as well as capital inflows from Russia.

"High real wage growth in economies in the Caucasus has been underpinned by the rise in export-import flows as well as inflows of capital and educated migrants from Russia and high commodity prices. Exports from the EU, UK and US to the Caucasus increased dramatically, hinting at the rise of ‘intermediated trade’," the bank explained.

Meanwhile, the economic output in all the EBRD regions is estimated to have grown by around 2.4 percent in the year as a whole.

"While this was slower than in 2021 as the war on Ukraine took its toll and the post-Covid recovery has mostly run out of steam, this outcome nonetheless exceeded expectations, in particular in central Europe, the Caucasus and Central Asia. Economies in Central Asia and the Caucasus benefitted from intermediating trade to Russia as well as inflows of capital and educated migrants from Russia," the report added.

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