For the next year, the bank’s report Regional Economic Prospect expects this trend to moderate further to five percent, in line with the previous forecast.

“In Georgia, robust growth of 10.3 percent is supported by a pickup in tourism, which has almost reached pre-pandemic levels, and by an increase in money transfers (boosted by the temporary inflow of Russian businesses and technology-sector professionals). These trends have helped to cover Georgia’s trade deficit and supported the appreciation of the lari, leading to an increase in foreign reserves. 

High energy prices were expected to support Azerbaijan’s economic growth in the near term. The May forecast of GDP growth of 4.5% for 2022 and moderation to 2.5% in 2023 remains unchanged.

Meanwhile in Armenia, the report forecasts robust growth of 8% in 2022, up from a previous estimate of 4.5%.

The slowdown is expected to be less gentle, with a drop to four percent likely in 2023. However, the latest growth estimate for 2023 remains above the earlier projection of 2.5%," - the report reads.

The EBRD said Azerbaijan was capitalising on high oil and gas revenues as a result of elevated prices and increased export revenues - but also on the strong performance of its non-energy sector - while Armenia and Georgia were benefiting from an inflow of Russian businesses and information and communication technology professionals boosting the service sectors of their small economies.