BAKU, Azerbaijan, October 17. Infrastructure projects in Central Asia and Caucasus are important for strengthening trade connectivity, Jihad Azour, Director of the Middle East and Central Asia Department at the International Monetary Fund (IMF), said in response to Trend’s question during a press briefing.
“The average growth rate of Caucasus and Central Asian countries remain strong at 5.6 percent this year, reflecting an upward revision of 0.7 percent compared to our projections back in the spring meetings. What explains this robust level of growth? You have a solid domestic demand that has also been compounded by credit expansion and stable or stronger hydrocarbon exports. We expect that the growth will gradually slow down to a medium level of 4 percent. And this also, of course, is different between countries who have oil and gas and those who are oil importers,” he said.
Azour noted that inflation, on the other hand, has accelerated in most of the CCA countries.
“And this is due to some demand pressure and also inflation import, especially from Russia.
In certain countries, the reform of the electricity tariff also contributed to some of this inflation. Countries in the Caucasus and Central Asia have recently enjoyed a relatively high level of growth and performed improvements in building intra-regional cooperation in a certain number of projects, including infrastructure. Several infrastructure projects in rail, or in electricity, are important for strengthening trade connectivity from east to west, from China to the various trade routes.
And those are important opportunities also to increase connections and connectivity between CCA countries to increase trade and economic integration,” noted Azour.
He pointed out that those public investments will require financing and a certain number of cases will have an impact on debt.
“We encourage countries to be vigilant, both in terms of strengthening their economic fundamentals and also make sure that those long-term projects that will improve their assets are, on the other hand, well-managed in terms of liabilities and increasing liabilities will remain under a certain level of debt that is sustainable,” he concluded.