The International Monetary Fund (IMF) published an Update For The Caucasus and Central Asia. According to the report, at the conference “Can Nations Agree? Macroeconomic Policy in a Non Cooperative World,” hosted by the Central Bank of Armenia on June 1–3, IMF staff presented the findings of a new departmental paper, “Rethinking Fiscal Policy and Frameworks in the CCA.” The paper shows that countries with stronger fiscal institutions—including credible medium term budget frameworks, well designed fiscal rules, and robust fiscal risk management—tend to pursue more countercyclical fiscal policies and achieve greater macroeconomic stability.
Looking ahead, the analysis points to key reform priorities for the region, including strengthening medium term fiscal frameworks, improving the design and implementation of fiscal rules, and enhancing automatic stabilizers to help economies respond more effectively to future shocks.
The conference also launched the new departmental paper on “Central Bank Independence and Monetary Policy Effectiveness in the Middle East and the CCA”, preliminary findings of which were presented in the previous newsletter. The paper shows that stronger central bank independence and monetary policy frameworks help contain inflation shocks and are associated with improved macro-fiscal outcomes over time.
Resilient Today, Vigilant for Tomorrow: Key Takeaways from the CCA Roundtable
Finance ministers and central bank governors from the region met during the IMF–World Bank Spring Meetings for their biannual roundtable, chaired by IMF Deputy Managing Director Bo Li. The discussions focused on sustaining growth and safeguarding macro‑financial stability amid rising global and regional uncertainty. Participants flagged spillovers from the war in the Middle East—through higher commodity prices, renewed inflation pressures, and weaker external demand, alongside potential opportunities from shifting trade and investment patterns.
There was broad agreement that now is not the time for complacency. Participants stressed the importance of sound macroeconomic fundamentals, credible policy frameworks, and clear communication, with some central banks emphasizing scenario based approaches to navigate uncertainty. They also highlighted the need to support private-sector-led growth through deeper structural reforms and regional cooperation, including on trade diversification, cross border payments, and connectivity—with the IMF playing a key role as a policy partner and convenor.
CCA Check Up: Good Momentum, Big to Do List
Recent IMF missions to six CCA countries—Armenia, Azerbaijan, Georgia, the Kyrgyz Republic, Tajikistan, and Uzbekistan—generally point to continued economic momentum. Activity is largely supported by strong domestic demand, investment, and services exports, though growth in Azerbaijan remains subdued amid declining hydrocarbon output. Across the region, fiscal and external buffers remain generally solid. While inflation has eased in some countries, it remains above target in several cases and has increased in others due to lingering demand pressures and higher energy and transport costs linked to the war in the Middle East. Overall, many countries enter this more uncertain environment from a position of strength, with resilient financial systems, enhanced buffers, and improved policy frameworks.
Looking ahead, IMF staff highlight a shared reform agenda to lock in stability and support sustainable, private sector led growth. Priorities include maintaining prudent fiscal stances while protecting space for infrastructure and social spending (Kyrgyz Republic, Uzbekistan, Tajikistan), keeping monetary policy focused on anchoring inflation expectations (Georgia, Armenia), and preserving exchange rate flexibility to absorb shocks. Structural reforms remain critical, particularly to strengthen SOE governance, deepen financial markets, improve labor market outcomes, and enhance the business climate. Advancing these reforms will help CCA economies navigate global headwinds and sustain durable and inclusive growth.
For country specific analyses, see the 2026 Article IV staff report for Azerbaijan, the IMF press release on Armenia’s Stand-By Arrangement review, and the 2026 Article IV staff concluding statements for Georgia, the Kyrgyz Republic, and Uzbekistan, with full staff reports forthcoming.
Data released since the start of the war in the Middle East point to rising price pressures, most visibly in oil importers (Armenia, Georgia, Kyrgyz Republic), where higher fuel costs and disrupted logistics are feeding through to domestic prices. By contrast, inflation has eased in hydrocarbon exporters (Azerbaijan, Kazakhstan), although rising food prices pose upside risks across the board. Growth has remained resilient in several countries (Armenia, Tajikistan) and has even strengthened in others (Georgia, Kyrgyz Republic, Uzbekistan), reflecting robust external inflows and commodity price support (Kazakhstan). Azerbaijan, however, has lagged behind, reflecting oil production constraints.
CCAMTAC Steps Up Engagement in the Region ahead of its New Program Phase
Over the past six months, CCAMTAC stepped up engagement with member countries and development partners, combining high-level dialogue, country outreach, and knowledge sharing to strengthen macroeconomic policies and institutions.
This period featured several high-profile regional events, including a roundtable on central bank governance, co-organized with the Swiss National Bank and Deutsche Bundesbank; a seminar for Kazakhstan’s Parliament and a workshop for academics on macroeconomic policy and resilience; a macro-fiscal peer network meeting on state-owned enterprises; and a revenue administration leaders’ forum, hosted by Uzbekistan’s Tax Committee.
Country outreach also expanded through presentations at regional policy fora—such as the CAREC Think Tank Development Forum and the Tianshan Forum for Central Asia Economic Cooperation—conferences hosted by the Central Bank of Uzbekistan and the Turkmen State Institute of Economics and Management, and guest lectures, including at the Kyrgyz Turkish Manas University (Bishkek), KIMEP (Almaty), and Nazarbayev University (Astana).
Recent outreach culminated in the dissemination of CCAMTAC’s Phase II Program Document, now under discussion at the 2026 Steering Committee meeting in Bishkek (June 4–5). A notable milestone was the Kyrgyz Republic’s announcement of a US$2 million contribution to Phase II.
