Economic turmoil in the South Caucasus.
Economic performance has been affected by two major external factors: turmoil in Russia, which remains a significant economic partner, and declining oil prices. While lower imported fuel bills are positive for Armenia and Georgia, there are second-round negative implications, through the impact on economic activity in Russia.
- Lower oil prices will lead to some cuts on infrastructure spending in Azerbaijan but these will be limited.
- Armenia will suffer the most from the Russian turmoil, but the positive impact of domestic factors will prevail in 2015.
- Georgia's more diversified economic links make it more resilient to Russian shocks.