Dutch bank ING has assessed the economic and monetary outlook for the Central Asia and Caucasus (CCA) region for 2027, APA-Economics reports.
According to ING's baseline scenario, the Central Bank of Azerbaijan is expected to keep its key interest rate largely unchanged in 2027.
The bank's analysts believe that countries in the region have demonstrated resilience against rising global inflation and the tight monetary policies of major central banks. Strong national currencies, positive real interest rates and external financial inflows are helping to limit imported inflation.
According to ING's forecast, Kazakhstan and Uzbekistan will retain room for cautious interest rate cuts in 2027. Armenia, meanwhile, will stand out as a country pursuing a tighter monetary policy in the region.
The bank also does not rule out an increase in geopolitical risks for the region. According to the analysts' alternative scenario, tighter Western oversight of trade and financial relations, as well as efforts by Russia and China to increase their economic influence in the region, could negatively affect investment and capital flows.
ING also considers it possible that the credit ratings of Uzbekistan and potentially Armenia could be upgraded by one notch in 2027. According to the bank, investors may begin to view these countries as markets approaching investment-grade status even before they receive official investment-grade ratings.
Note that the Central Bank of Azerbaijan last kept its key interest rate unchanged at 6.5%, the upper limit of the interest rate corridor at 7.5%, and the lower limit at 5% on October 29 this year.
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