IMF: Gulf, Caucasus, and Central Asian countries have great potential for expanding trade

The Gulf Cooperation Council (GCC) countries, as well as the Caucasus and Central Asia, have significant potential to expand trade and investment ties, but further structural reforms are needed to realize this potential, International Monetary Fund (IMF) economist Francois Painchaud said during a virtual discussion dedicated to the presentation of the new update "Strengthening Economic Cooperation among the Gulf Cooperation Council, Caucasus, and Central Asian Countries," Report informs.

According to him, key areas for developing cooperation include improving logistics and transport connectivity, reducing trade barriers, and enhancing conditions for attracting foreign direct investment.

Trade will benefit most from improved logistics and governance, as well as from reducing trade restrictions and tariffs, the IMF representative noted.

The Fund estimates that addressing existing gaps could have a particularly significant impact on investment inflows to the Caucasus and Central Asia. The potential growth of foreign direct investment in these countries is estimated at approximately 0.7% of GDP, while for the Gulf Cooperation Council countries, this figure is approximately 0.14% of GDP.

The IMF update notes that the countries of the two regions have complementary economic structures: the Gulf states have traditionally been sources of capital, while the countries of the Caucasus and Central Asia are primarily recipients of foreign investment.