EFSD Participates in Caucasus and Central Asia IFI Spring Meeting

The Eurasian Fund for Stabilization and Development (EFSD) has taken part in a meeting of International Financial Institutions (IFI) operating in Central Asia and the Caucasus, organized by the International Monetary Fund (IMF) as part of the IMF/World Bank Spring Meetings series. The gathering brought together key development partners to assess pressing regional challenges and explore approaches to mitigating their impact.

The central focus of discussions was the potential economic fallout from the Iranian conflict. Participants examined risks arising from reduced trade flows from Gulf countries and the structural reforms needed to help regional economies adapt to emerging shocks.

Tigran Kostanyan, EFSD Mission Chief for the Kyrgyz Republic and Tajikistan, delivered a report on the current situation, highlighting that currency markets in Armenia, the Kyrgyz Republic, and Tajikistan have responded to the crisis with considerably greater resilience compared with 2022. The report also identified key risk factors and related mitigation mechanisms:

• Inflation: Rising oil prices and logistics disruptions could intensify price pressures across the region.
• Fiscal policy: Given the still-favorable external environment, building fiscal buffers and refraining from additional stimulus remains advisable.
• Trade: Potential disruptions to re-export flows continue to be a critical vulnerability for countries in the region.

Meeting participants underscored the importance of strengthening coordination between fiscal and monetary policies, as well as leveraging the current environment to develop domestic government debt markets. The Caucasus and Central Asia IFI Meeting remains an important platform for policy dialogue and coordination among international financial institutions operating in the region.