WB: South Caucasus may experience sharp rise in production

In the third quarter of this year, the South Caucasus saw an increase in COVID-19 cases, and the incidence was much higher in Azerbaijan and Georgia than in previous peaks, said an updated report of the World Bank (WB) for Europe and Central Asia.

Report informs that although the number of cases in the South Caucasus began to decrease or stabilize in the fourth quarter, the death rate remains high. Azerbaijan and Georgia have re-imposed selected restrictions to prevent an increase in infections.

Among the sub-regions of Europe and Central Asia (ECA), the South Caucasus experienced the sharpest decline in production last year, with the economy shrinking by more than 5%. Besides the effects of the pandemic, the economic collapse has been exacerbated by the armed conflict between Armenia and Azerbaijan.

The South Caucasus is expected to grow sharply by 5.8% this year, supported by a rapid recovery in production, consumption, and exports.

According to the document, economic growth in the region will be 3.9% next year and 3.6% in 2023.

Economic growth in Azerbaijan is expected to be further strengthened by energy production, supported by an increase in OPEC + production quotas.