SEPT. 25 2015 (The Conway Bulletin) – The Georgian Central Bank is one of the more open central banks in the region. It holds scheduled meeting and posts reasonably detailed explanations on its monetary policy decisions.

In short it can give people interested in Central Asia and the South Caucasus something of an insider’s view of things. This makes its statement on Sept. 23 that accompanied an interest rate rise all the more important.

And the Georgian Central Bank was blunt in its assessment of the problems facing the wider region.

“Real GDP growth in the second quarter was consistent with the forecasts,” it said. “The factor hindering growth is the external sector, which, given the dire economic situation in the region negatively affects export of goods and services.”

Of course the Georgian Central Bank was talking about poor GDP growth in Georgia but the more important word in this statement for the wider region was “dire”. The Georgian Central Bank had said what other government economists from Tajikistan to Kazakhstan to Azerbaijan and Armenia have been thinking but shying away from saying. The prospects for their economies, with inflation rising and the values of their currencies falling, is dire.

Of course there are differences between the various regional economies – Kazakhstan and Azerbaijan are heavily dependent on oil and gas sales, for example, while Georgia isn’t – but many of the pressures are shared ones and if one Central Bank, in this case the Georgian one, starts describing the situation as “dire” it is important to listen.

By James Kilner, Editor, The Conway Bulletin