BAKU, Azerbaijan, April 10. The World Bank (WB) projects the GDP growth in the South Caucasus to slow down to 3 percent in 2023, as growth slows for key trading partners, including the EU, Trend reports via the WB's Europe and Central Asia Economic Update.
At the same time, the South Caucasus' GDP growth in 2022 stood at 7 percent in 2022, the banks estimations said.
However, the economic growth of the region is expected to recover slightly to 3.4 percent in 2024, and further to 3.6 percent in 2025.
For Azerbaijan, the growth is expected to be supported by increased investments in hydrocarbons, following several energy deals recently inked with the EU, and by growth in spending for the implementation of Azerbaijan’s 2022–26 Socio-Economic Development Strategy.
"In December, Azerbaijan and Georgia signed an agreement with Romania and Hungary to build an electric transmission cable under the Black Sea that will export power from the two countries in the South Caucasus to the European Union. A feasibility study is expected to be completed before the end of 2023," the report added.
According to the outlook, heavy money and migrants flow in Georgia and Armenia is expected to support economic growth in those countries. However, this could constrain domestic demand.
"Nevertheless, tentative signs are emerging that some of these migrant and capital flows from Russia are reversing, at least in Georgia, which could pose a drag on domestic demand," the report noted.
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