MOSCOW, November 4 (RIA Novosti) — The Caucasus and Central Asia are likely to face a Gross domestic product (GDP) decline from 6.6 percent to about 5.5 percent in 2014-2015 owing to the deceleration in Russian economics, the International Monetary Fund's (IMF) reported Tuesday.
"Weakening domestic demand and spillovers from the slowdown in Russia are dampening economic growth in the CCA [Caucasus and Central Asia] to about 5 1/2 percent in 2014-15, 3/4 of a percentage point lower that projected in the May 2014 Regional Economic Outlook Update," the report published on the fund's official website said.
Economic dynamics in Russia has a significant impact on the expectations in the CCA region via numerous factors, particularly trade, investments and remittances. Oil exporters in the CCA — Azerbaijan, Kazakhstan, Turkmenistan, and Uzbekistan — are about to face a decline up to 5.6 percent in 2014, compared with 6.8 percent in 2013. These states are in some extent protected from Russian decrease given high oil prices and the diversified export markets providing fiscal bumper, according to the survey.
"A further deepening of geopolitical tensions between Russia and Ukraine could have a significant impact on the CCA region, over both the near and medium term," the survey said. This tendency is reflected in increased investors' cautions, consumer lending slowdown, and higher geopolitical risks, the outlook maintained.
The GDP growth in the CCA has been staying strong over the past 20 years, even though it was unstable and dependent on commodities, while unemployment and poverty remain to be major concerns.
