"Trade tensions observed since April have created significant uncertainty. However, the direct impact of US tariffs on South Caucasus countries will remain limited," said Thanos Arvanitis, Deputy Director of the IMF’s Middle East and Central Asia Department, APA reports.
According to him, the region’s export volume to the US is relatively small, and energy resources—oil and gas—are excluded from the tariffs. As a result, exports to the US from these countries, excluding oil and gas, are extremely low, and the 10% base tariff will not significantly affect regional economies.
Still, Arvanitis believes countries should consider three main channels of potential consequences.
“First, trade tensions will impact global growth, which in turn affects key trading partners of South Caucasus and Central Asia. Slower growth in those partner countries will reflect on regional economies. The second channel is financial volatility. Markets remain unstable, and one risk to monitor is rising borrowing costs. Debt spreads have widened for emerging markets, including this region. As a result, increasing uncertainty will affect these countries through financial markets,” the IMF official explained.
Arvanitis identified the third channel as commodity price fluctuations: “We are already seeing this. Since early this year, oil prices have dropped by about 15%. This decline will affect countries differently depending on whether they are oil importers or exporters. Naturally, it benefits importers but harms exporters. On the other hand, prices for some commodities, especially gold—which has reached historic highs—are rising. Gold-producing countries like Uzbekistan and others in the region will benefit. Therefore, it is essential to consider not just the direct effect of tariffs, but also indirect effects through different channels to comprehensively assess the possible outcomes for regional countries.”
He added that trade negotiations are ongoing, and discussions are being held to reduce uncertainty and seek more stable, long-term solutions.
Follow us on Telegram
t.me/apanewsaz
Follow us on Instagram
Follow us on Facebook
Follow us on Twitter
