ADB flags risks for Caucasus and Central Asia due to situation in Middle East

Risks of deterioration linked to the conflict in the Middle East are negatively affecting the economic outlook of countries in the Caucasus, Central and West Asia, Senior Economist for the region at the Asian Development Bank (ADB), George Luarsabishvili, said during a media briefing dedicated to the presentation of the April issue of the Asian Development Outlook (ADO).

Report quotes him as saying the main downside factors include rising imported inflation, weaker-than-expected global economic growth, widening external imbalances, and tightening financial conditions, including reduced access to credit resources and capital.

"At the same time, positive factors include increased investment in resilience and competitiveness, acceleration of the green transition, and stronger momentum of structural reforms," Luarsabishvili noted.

According to the report, economic growth in the Caucasus, Central and West Asia region is projected at 4.2% in 2026, compared to 4.6% in 2025, and 4.4% in 2027. Inflation in the region is expected to reach 20.6% this year, down from 25.6% in 2025, and to decline further to 16.3% next year.