BAKU, Azerbaijan, March 6. The International Monetary Fund (IMF) continues to be a close partner to the Caucuses and Central Asia region, a source at the IMF spokesman's office told Trend.
According to the source, the fund aims to step up its engagement with the region through policy advice, financial support, and technical assistance, including through the Caucasus, Central Asia, and Mongolia Regional Capacity Development Center (CCAMTAC), and based on regional analytical and policy work.
Regarding policy priorities, the IMF recommends that Caucuses and Central Asia authorities remain focused on disinflation, strengthening buffers, and improving economic resilience.
"Monetary policy should remain restrictive until core inflation is firmly on a downward trend and inflation expectations are well anchored. Reforms to strengthen central bank independence and monetary policy effectiveness are essential," the source added.
Simultaneously, the IMF highlighted the importance of fiscal policy priorities that aim to maintain or enhance fiscal space. This involves refining tax policy and administration, as well as trimming universal subsidies and minimizing spending on lower-priority areas. Fiscal consolidation efforts would also contribute to fostering disinflation, the fund noted.
"On structural reforms, the high-growth environment provides an opportunity to advance market transition reforms to foster economic diversification and develop more inclusive, sustainable, and greener economies," the source added.
