George Luarsabishvili: South Caucasus countries must boost food production

It is extremely important for the governments of the South Caucasus countries, including Azerbaijan, to take timely measures to stabilize food prices, provide targeted support, and possibly stimulate the production of local food products and basic foodstuffs on a more permanent basis, George Luarsabishvili, Senior Economist for the Caucasus, Central and West Asia at the Asian Development Bank (ADB), in response to a question from Report at a media briefing dedicated to the presentation of the April review Asian Development Outlook.

According to him, for net oil importers, the main channel for transmitting the shock from rising oil prices is pressure on the current account.

"Due to deteriorating terms of trade and rising import costs, the trade balance comes under negative impact. On the contrary, oil exporters benefit from high energy prices, and their external economic and fiscal indicators may improve. This is exactly what we observe in the case of Azerbaijan, which benefits from high energy prices, and this translates into improved external and fiscal balance positions. Among additional transmission channels, we also mentioned imported inflation, which can affect economies. Or, for example, if an economy is already facing serious borrowing constraints, then their ability to service debt may deteriorate, and risk premiums may rise," the senior economist noted.

Luarsabishvili noted that many countries in the region are exporters of agricultural products, and due to rising fertilizer prices, food costs in these countries may increase.