Page 56 - bne IntelliNews monthly magazine December 2024

56 I Eurasia bne December 2024
in these smaller economies,” Oxford Economics reports.
Despite stricter immigration controls following the tragic Crocus City Hall mall terror attack on March 22 that saw over 140 people killed, the acute need for low-skilled workers has sustained these remittance flows, with Tajikistan seeing notable increases in 2022–24.
In parallel, household demand across the Caucasus and Central Asia has accelerated, supported by moderating inflation rates and favourable monetary policy. Inflation in Georgia and Armenia has dropped to record lows, allowing central banks to cut rates further. This, in turn, has driven a surge in consumer lending and real wage
growth, especially in Kyrgyzstan, where retail sales have shown double-digit increases since 2023.
“Retail sales growth recently picked up in Azerbaijan and Kazakhstan,” analysts note, attributing the uptick to low infla- tion, rising wages, and a lending boom. Azerbaijan’s domestic demand is fore- cast to rise by 6.3% this year, up from 2% in 2023, while Georgia’s demand growth is expected to reach 8.3% in 2024.
Tourism boom drives investment in hospitality
Another quirk of the sanctions has been to completely remake tourism in the region. Russians love to travel and in theory they are still able to visit their favourite holiday spots in
Europe, but as airline routes between the EU and Russia have been effectively closed the long roundabout routes
are prohibitively expensive and time consuming leading most Russians to switch to alternative destinations with direct flights from Moscow.
sanctions and a weak rouble has driven many of Russia’s middle class to seek travel destinations within
the region rather than in the West, driving up tourism receipts across ex-Soviet countries, with some countries reporting considerable increases in services exports since early 2022. The resulting influx of tourists has stimulated investment in local hospitality sectors, reinforcing economic resilience in these nations.
What Trump’s return means for Armenia and the South Caucasus
Ani Avetisyan
Donald Trump's return to the White House as the 47th president of the United States comes at a critical time for the South Caucasus region, as Georgia remains highly polarised after the controversial re-election of the pro-Russian Georgian Dream party, and as Armenia and Azerbaijan seek to finalise a historic peace deal.
Trump's victory has raised both hopes and concerns in Yerevan. Armenian Prime Minister Nikol Pashinyan was quick to congratulate Trump on his victory, expressing his hope to “work together” on the strategic partnership between the two countries, but many
in the region are worried that the transition of power in Washington could significantly decrease US involvement in the ongoing peace process with Azerbaijan.
Pashinyan’s extensive message to Trump, however, was notably positive and optimistic. Pashinyan emphasised
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the “unprecedented” improvement
in the two countries' relations in the past years, hoping that the trend will continue under Trump’s presidency. Pashinyan praised Trump personally, saying that he is confident that Trump’s "rich experience, knowledge and abilities will best serve to ensure the well-being of the American people,
promote the interests of the United States, and strengthen the global role of the United States".
The timing of the elections is particularly crucial for Armenia, as Joe Biden's administration has become increasingly involved in the process in the past year. The improvement that
The timing of the elections is particularly crucial for Armenia's Nikol Pashinyan's (left), as the administration of Joe Biden (right) has become increasingly involved in the peace process in the past year. / bne IntelliNews