WB considers a territorial dispute between Armenia and Azerbaijan a potential economic shock in region

10.01.2018,16:36


January 10, Fineko/abc.az. The World Bank has calculated risks, which may affect the economies of Europe and Central Asia.

According to report "Global Economic Prospects: Europe & Central Asia" the forecasted economic growth in the region is fragile and is subject to threats related to the increased level of political uncertainty and geopolitical risks within the region and beyond. Additional risk factors for the future are renewed decline in commodity prices and destabilization of international financial markets. The factors of vulnerabilities are weaknesses in the national banking systems. The curtailment of European integration will affect the economies of Europe and Central Asia due to the close trade and financial ties between these regions.

Geopolitical tensions in Ukraine, a tightening of international sanctions on Russia, or heightened tensions with the European Union could deter international investors and weigh on growth.

A new round of escalating violence in Syria can undermine confidence of investors and consumers. Examples of potential turmoil in the region - terrorist acts in Russia, blockade of freight traffic in the east of Ukraine, and continuation of the territorial dispute between Armenia and Azerbaijan.

And on the contrary, strengthening of relationships between the countries of Central Asia, including a preliminary agreement on the demarcation of the border between Kyrgyzstan and Uzbekistan and restoration of direct flights between Tajikistan and Uzbekistan, is an example of risk reduction.

Resumption of the decline in commodity prices is another threat to economic growth in the countries which are exporters of commodities in the region, while indiscriminate tightening of conditions in global financial markets can exert pressure upon the exchange rate, contribute to raising the cost of borrowing and lead to capital outflow.

 

Ключевые слова: World Bank Global Economic Prospects