## 3. Caucasus and Central Asia: Addressing Legacy Challenges amid Global Uncertainties ## Source details **Canonical URL:** [3. Caucasus and Central Asia: Addressing Legacy Challenges amid Global Uncertainties](https://www.imf.org/-/media/files/publications/reo/mcd-cca/2019/april/english/cca0419.pdf) ## Other formats - [Markdown version](/-/media/files/publications/reo/mcd-cca/2019/april/english/cca0419.pdf.md) - [Structured JSON version](/-/media/files/publications/reo/mcd-cca/2019/april/english/cca0419.pdf.json) --- ### Growth outlook and inflation - Growth in the CCA region is projected to remain stable at 4.1 percent this year and next, after recovering from large external shocks during 2014–16. - Oil and gas exporters are expected to grow by 4 percent in 2019 and over the near term. - Oil GDP growth is projected to decelerate to 2.8 percent this year from 3.2 percent in 2018. - Growth in oil and gas importers is expected to decline from 5.1 percent in 2018 to 4.5 percent during 2019–20; this represents a downward revision of 0.3 percentage point from the October 2018 Regional Economic Outlook. - Uzbekistan’s ongoing reforms and further regional integration represent an upside risk to the region’s growth outlook. - Inflation in the CCA region is projected to decelerate from 8.2 percent in 2018 to 7.8 percent in 2019 and 6.4 percent in 2020. - Lower inflation has opened space for more accommodative monetary policy among oil and gas importers (Armenia, Georgia, Tajikistan) and Azerbaijan; oil and gas exporters have less space for easier monetary policies due to balance pressures on exchange rates and the need to ensure price stability. - Medium-term growth remains weak: growth in the CCA region is projected to average just 4.2 percent during 2020–23, less than half the average rate recorded during the 2000s. ### Legacy constraints on growth and reform priorities - Legacy challenges and unfinished reforms constrain investment and productivity gains and threaten medium-term growth potential. - Priority reform areas identified: - Repair financial systems (address high levels of problem assets and NPLs, resolve problem banks, strengthen supervision and governance). - Complete transitions to modern monetary policy frameworks and greater exchange rate flexibility. - Rebuild fiscal buffers and address contingent fiscal liabilities. - Remove structural rigidities and improve governance to boost competitiveness and inclusive growth. ### Financial sector vulnerabilities - Banking systems remain saddled with high levels of problem assets; officially reported NPLs are relatively low, but problem assets (restructured loans, watch loans, and NPLs) are very high in some countries. - Drivers of problem assets include: - weak underwriting standards, - directed lending (Kazakhstan, Uzbekistan), - foreign currency lending to unhedged borrowers (Armenia, Azerbaijan, Tajikistan), - poor payment culture and weak rule of law (Kazakhstan, Uzbekistan). - Regulatory forbearance compounds vulnerabilities through under provisioning and related overstatement of banking system profitability and capital adequacy. - Consequences: - Pockets of bank stress persist. - NPLs are eroding lending capacity and inhibiting credit growth. - Some banks face underlying liquidity challenges, resulting in sizable official support (Kazakhstan) and conversion of central bank liquidity support into equity (Kyrgyz Republic). - Reliance on external funding exposes banking systems to liquidity shocks; ongoing bank closures and delicensing (Azerbaijan, Kazakhstan) point to lingering insolvency risks. - Financial sector reforms have been slow and uneven: limited progress in addressing legacy NPLs (Kazakhstan), resolving problem banks (Azerbaijan, Kyrgyz Republic, Tajikistan), and dealing with unhedged borrowers (Armenia); gaps remain in regulatory, supervision, and governance frameworks. ### Monetary and exchange rate regime transitions - During 2014–16, declining oil and commodity prices, weaker growth in Russia and China, and the depreciation of the Russian ruble put pressure on currencies and international reserves. - Kazakhstan abandoned its exchange rate peg in favor of an inflation-targeting framework and more flexible exchange rate. - Azerbaijan, the Kyrgyz Republic, and Tajikistan announced intentions to move to inflation targeting and adopted less rigid exchange rate regimes; Armenia and Georgia were already under inflation-targeting and floating exchange rate regimes. - Exchange rates remain largely managed and overvalued in some countries (Kyrgyz Republic, Tajikistan, Turkmenistan). - Limited exchange rate flexibility reflects concerns about limited price discovery in shallow FX markets, financial stability risks from dollarized bank balance sheets, and inflation pass-through. - Policy implication: more flexible exchange rates would act as external shock absorbers, better supporting competitiveness and confidence in domestic currencies. ### Fiscal positions and contingent liabilities - Strengthened fiscal institutions and frameworks (adoption of fiscal rules in Armenia, Azerbaijan, Kyrgyz Republic; greater fiscal transparency in Uzbekistan; tax code reforms in Armenia, Georgia, Uzbekistan) have improved macroeconomic management. - Expansionary fiscal policies during 2014–16 contributed to notable rises in public debt in several countries and an erosion of fiscal buffers. - Debt remains broadly contained compared with some peers, but the sudden rise in indebtedness increases vulnerability owing to substantial contingent fiscal liabilities linked to the debt of large state-owned enterprises and state-controlled banks that have built up outside official government budgets. - Specific datapoint: Azerbaijan debt includes approximately 30 percent of GDP in guarantees. ### Exposure to global headwinds and external risks - The CCA region is exposed to lower growth in key trading partners, particularly through remittance channels; remittance inflows in some oil and gas importers vary between 6 and 36 percent of GDP. - Weaker trading-partner growth, sanctions against Russia, and geopolitical developments (for example, security concerns from a possible US pullout from Afghanistan) raise regional uncertainty and can harm expectations, confidence, and investment. - Large swings in global oil prices increase risks for the region due to continued commodity dependence; growth has become more tightly linked with global commodity prices since 2014–16. - Lack of export diversification, low export growth, and concentrated export markets (China, Russia, euro area) reinforce exposure to slowing global growth and volatile oil prices; this combination will weigh on current account balances directly for oil and gas exporters and indirectly for oil and gas importers through trade and financial links with Russia and the euro area. - Without greater exchange rate flexibility, adequacy of international reserves coverage could be tested in some countries. - Rising global trade tensions pose additional risks to the region. ### Regional trade and external competitiveness - The region is feeling the effects of slowing global trade that began in the final quarter of 2018, illustrating the importance of ensuring external competitiveness through greater exchange rate flexibility. - Trade indicators show downward revisions and weakening export and import volume growth for CCA trading partners and the CCA region. ### Policy urgency: enhancing resilience and addressing legacy challenges - Mounting external uncertainties increase the urgency of: - Decisively addressing legacy challenges. - Completing key structural reforms. - Rebuilding fiscal buffers. - Goals: higher medium-term inclusive growth and living standards by reducing the role of the state in economic activity and creating an environment more conducive to private sector activity. ### Financial sector repair (policy recommendations) - Repair the financial sector to support growth by: - Strengthening regulatory and supervisory frameworks and macroprudential policies across countries. - Avoiding regulatory forbearance. - Improving underwriting standards and credit risk management (noted for Armenia, Kazakhstan, Uzbekistan). - Improving corporate governance in banks and strengthening the judiciary and legal systems to enhance the rule of law (noted for Armenia, Kazakhstan, Uzbekistan). - Establishing stronger resolution and crisis management frameworks to facilitate orderly and faster resolution of nonviable banks with limited state support (noted for Azerbaijan, Georgia, Kyrgyz Republic, Tajikistan). - Strengthening securities regulations and building local currency yield curves through regular sovereign issuance to foster capital market development. ### Monetary policy modernization (policy recommendations) - Fully modernize monetary policy frameworks to anchor inflation expectations and foster exchange rate flexibility: - Recent moves toward greater exchange rate flexibility have helped competitiveness but left unfinished monetary policy frameworks less effective in steering inflation expectations. - Complete the transition to more credible interest rate or rules-based frameworks (noted for Azerbaijan, Kyrgyz Republic, Tajikistan, Turkmenistan, Uzbekistan) once key conditions are in place. - Key conditions include ensuring central bank operational and financial independence and establishing the primacy of the inflation objective in a forward-looking strategy. - Develop adequate monetary instruments and forecasting capabilities (noted for Azerbaijan, Kazakhstan, Kyrgyz Republic, Tajikistan, Uzbekistan). - Address gaps in data and coordination with fiscal authorities to enhance central bank communication and anchor inflation expectations. - Deeper and more liquid domestic debt and foreign exchange markets would improve intermediation and monetary transmission. ### Fiscal consolidation and rebuilding buffers (policy recommendations) - Rebuild fiscal buffers through growth-friendly consolidation: - Continue efforts to widen the tax base, reduce exemptions, and make tax systems fairer. - Rationalize expenditures while protecting capital and social spending where public debt has increased sharply (example: Azerbaijan) or where the risk of debt distress is high (Tajikistan). - Fiscal consolidation may be needed where fiscal rule limits call for upgrading fiscal policy measures (Armenia) and where support for external adjustment and control of inflation is needed (Turkmenistan, Uzbekistan). - Manage fiscal risks and contingent liabilities through improved governance of state-owned enterprises. ### Private sector development and diversification (policy recommendations) - Promote private sector development and diversification by: - Accelerating structural reforms to foster diversification and private-sector-led inclusive growth. - Gradually reducing the role of the state in the economy to level the playing field and foster a more market-based system. - Streamlining regulations, strengthening legal frameworks, and improving tax systems. - With healthier banks and fully market-determined exchange rates, foster stronger links to global value chains, economic diversification, and higher medium-term growth potential. ### Governance and anti-corruption (policy recommendations) - Promote good governance and fight corruption: - Weak governance and corruption underlie the region’s legacy challenges and incomplete reforms. - Strengthen institutional frameworks and transparency in financial sector oversight, tax administration, public financial management, central bank governance and operations, and anti-corruption and anti-money-laundering frameworks. - Such reforms would reduce regulatory capture, improve public sector efficiency, raise revenue collection, and positively impact deficits, debt sustainability, and public service delivery. - The IMF has a new, enhanced framework for engagement on governance issues to promote systematic, effective, and candid engagement on macro-critical governance vulnerabilities; the IMF will be rolling out this framework in CCA countries in the coming year. ### Key CCA region economic indicators and projections (percent of GDP, unless otherwise indicated) - CCA (aggregate) - Real GDP (annual growth): Average 2000–15 = 7.8; 2016 = 2.7; 2017 = 4.9; 2018 = 4.2; 2019 = 4.1; 2020 = 4.1 - Current Account Balance: Average 2000–15 = 0.7; 2016 = –6.5; 2017 = –2.7; 2018 = 0.5; 2019 = –0.5; 2020 = –0.1 - Overall Fiscal Balance: Average 2000–15 = 1.9; 2016 = –3.5; 2017 = –3.8; 2018 = 0.4; 2019 = 0.5; 2020 = 0.8 - Inflation (year average; percent): Average 2000–15 = 8.8; 2016 = 10.4; 2017 = 9.1; 2018 = 8.2; 2019 = 7.8; 2020 = 6.4 - CCA oil and gas exporters (Azerbaijan, Kazakhstan, Turkmenistan, and Uzbekistan) - Real GDP (annual growth): Average 2000–15 = 8.1; 2016 = 2.7; 2017 = 4.8; 2018 = 4.1; 2019 = 4.0; 2020 = 4.1 - of which non-oil growth: Average 2000–15 = 8.3; 2016 = 1.1; 2017 = 2.9; 2018 = 3.9; 2019 = 3.9; 2020 = 3.9 - Current Account Balance: Average 2000–15 = 1.9; 2016 = –6.2; 2017 = –2.4; 2018 = 1.6; 2019 = 0.5; 2020 = 0.8 - Overall Fiscal Balance: Average 2000–15 = 2.7; 2016 = –3.2; 2017 = –3.7; 2018 = 0.8; 2019 = 1.0; 2020 = 1.3 - Inflation (year average; percent): Average 2000–15 = 9.0; 2016 = 11.5; 2017 = 9.6; 2018 = 8.9; 2019 = 8.3; 2020 = 6.6 - CCA oil and gas importers (Armenia, Georgia, the Kyrgyz Republic, and Tajikistan) - Real GDP (annual growth): Average 2000–15 = 6.2; 2016 = 3.5; 2017 = 6.0; 2018 = 5.1; 2019 = 4.5; 2020 = 4.5 - Current Account Balance: Average 2000–15 = –7.9; 2016 = –8.5; 2017 = –4.8; 2018 = –7.3; 2019 = –7.4; 2020 = –6.8 - Overall Fiscal Balance: Average 2000–15 = –2.9; 2016 = –5.4; 2017 = –4.3; 2018 = –2.5; 2019 = –3.0; 2020 = –2.7 - Inflation (year average; percent): Average 2000–15 = 7.0; 2016 = 1.8; 2017 = 4.5; 2018 = 2.7; 2019 = 3.4; 2020 = 4.1 *Source: IMF, Middle East and Central Asia Department, REO Update, April 2019.* ### 3. Caucasus and Central Asia: Addressing Legacy ### 3. Caucasus and Central Asia: Addressing Legacy Challenges amid Global Uncertainties ### Growth outlook and inflation - Growth in the CCA region is projected to remain stable at 4.1 percent this year and next, after recovering from large external shocks during 2014–16. - Oil and gas exporters are expected to grow by 4 percent in 2019 and over the near term. - Oil GDP growth is projected to decelerate to 2.8 percent this year from 3.2 percent in 2018. - Growth in oil and gas importers is expected to decline from 5.1 percent in 2018 to 4.5 percent during 2019–20; this represents a downward revision of 0.3 percentage point from the October 2018 Regional Economic Outlook. - Uzbekistan’s ongoing reforms and further regional integration represent an upside risk to the region’s growth outlook. - Inflation in the CCA region is projected to decelerate from 8.2 percent in 2018 to 7.8 percent in 2019 and 6.4 percent in 2020. - Lower inflation has opened space for more accommodative monetary policy among oil and gas importers (Armenia, Georgia, Tajikistan) and Azerbaijan; oil and gas exporters have less space for easier monetary policies due to balance pressures on exchange rates and the need to ensure price stability. - Medium-term growth remains weak: growth in the CCA region is projected to average just 4.2 percent during 2020–23, less than half the average rate recorded during the 2000s. ### Legacy constraints on growth and reform priorities - Legacy challenges and unfinished reforms constrain investment and productivity gains and threaten medium-term growth potential. - Priority reform areas identified: - Repair financial systems (address high levels of problem assets and NPLs, resolve problem banks, strengthen supervision and governance). - Complete transitions to modern monetary policy frameworks and greater exchange rate flexibility. - Rebuild fiscal buffers and address contingent fiscal liabilities. - Remove structural rigidities and improve governance to boost competitiveness and inclusive growth. ### Financial sector vulnerabilities - Banking systems remain saddled with high levels of problem assets; officially reported NPLs are relatively low, but problem assets (restructured loans, watch loans, and NPLs) are very high in some countries. - Drivers of problem assets include weak underwriting standards, directed lending (Kazakhstan, Uzbekistan), foreign currency lending to unhedged borrowers (Armenia, Azerbaijan, Tajikistan), and a poor payment culture and weak rule of law (Kazakhstan, Uzbekistan). - Regulatory forbearance compounds vulnerabilities through under provisioning and related overstatement of banking system profitability and capital adequacy. - Consequences: - Pockets of bank stress persist. - NPLs are eroding lending capacity and inhibiting credit growth. - Some banks face underlying liquidity challenges, resulting in sizable official support (Kazakhstan) and conversion of central bank liquidity support into equity (Kyrgyz Republic). - Reliance on external funding exposes banking systems to liquidity shocks; ongoing bank closures and delicensing (Azerbaijan, Kazakhstan) point to lingering insolvency risks. - Financial sector reforms have been slow and uneven: limited progress in addressing legacy NPLs (Kazakhstan), resolving problem banks (Azerbaijan, Kyrgyz Republic, Tajikistan), and dealing with unhedged borrowers (Armenia); gaps remain in regulatory, supervision, and governance frameworks. ### Monetary and exchange rate regime transitions - During 2014–16, declining oil and commodity prices, weaker growth in Russia and China, and the depreciation of the Russian ruble put pressure on currencies and international reserves. - Kazakhstan abandoned its exchange rate peg in favor of an inflation-targeting framework and more flexible exchange rate. - Azerbaijan, the Kyrgyz Republic, and Tajikistan announced intentions to move to inflation targeting and adopted less rigid exchange rate regimes; Armenia and Georgia were already under inflation-targeting and floating exchange rate regimes. - Nevertheless, exchange rates remain largely managed and overvalued in some countries (Kyrgyz Republic, Tajikistan, Turkmenistan). - Limited exchange rate flexibility reflects concerns about limited price discovery in shallow FX markets, financial stability risks from dollarized bank balance sheets, and inflation pass-through. - Policy implication: more flexible exchange rates would act as external shock absorbers, better supporting competitiveness and confidence in domestic currencies. ### Fiscal positions and contingent liabilities - Strengthened fiscal institutions and frameworks (adoption of fiscal rules in Armenia, Azerbaijan, Kyrgyz Republic; greater fiscal transparency in Uzbekistan; tax code reforms in Armenia, Georgia, Uzbekistan) have improved macroeconomic management. - Expansionary fiscal policies during 2014–16 contributed to notable rises in public debt in several countries and an erosion of fiscal buffers. - Debt remains broadly contained compared with some peers, but the sudden rise in indebtedness increases vulnerability owing to substantial contingent fiscal liabilities linked to the debt of large state-owned enterprises and state-controlled banks that have built up outside official government budgets. - Specific datapoint: Azerbaijan debt includes approximately 30 percent of GDP in guarantees. ### Exposure to global headwinds and external risks - The CCA region is exposed to lower growth in key trading partners, particularly through remittance channels; remittance inflows in some oil and gas importers vary between 6 and 36 percent of GDP. - Weaker trading-partner growth, sanctions against Russia, and geopolitical developments (for example, security concerns from a possible US pullout from Afghanistan) raise regional uncertainty and can harm expectations, confidence, and investment. - Large swings in global oil prices increase risks for the region due to continued commodity dependence; growth has become more tightly linked with global commodity prices since 2014–16. - Lack of export diversification, low export growth, and concentrated export markets (China, Russia, euro area) reinforce exposure to slowing global growth and volatile oil prices; this combination will weigh on current account balances directly for oil and gas exporters and indirectly for oil and gas importers through trade and financial links with Russia and the euro area. - Without greater exchange rate flexibility, adequacy of international reserves coverage could be tested in some countries. - Rising global trade tensions pose additional risks to the region. *Source: IMF, Middle East and Central Asia Department, REO Update, April 2019.* ### 2. Oil ### 2. Oil ### Regional trade and external competitiveness - The region is feeling the effects of slowing global trade that began in the final quarter of 2018, illustrating the importance of ensuring external competitiveness through greater exchange rate flexibility. - Trade indicators (Figures referenced in source) show downward revisions and weakening export and import volume growth for CCA trading partners and the CCA region. ### Policy urgency: enhancing resilience and addressing legacy challenges - Mounting external uncertainties increase the urgency of: - Decisively addressing legacy challenges. - Completing key structural reforms. - Rebuilding fiscal buffers. - Goals: higher medium-term inclusive growth and living standards by reducing the role of the state in economic activity and creating an environment more conducive to private sector activity. ### Financial sector repair (policy recommendations) - Repair the financial sector to support growth by: - Strengthening regulatory and supervisory frameworks and macroprudential policies across countries. - Avoiding regulatory forbearance. - Improving underwriting standards and credit risk management (noted for Armenia, Kazakhstan, Uzbekistan). - Improving corporate governance in banks and strengthening the judiciary and legal systems to enhance the rule of law (noted for Armenia, Kazakhstan, Uzbekistan). - Establishing stronger resolution and crisis management frameworks to facilitate orderly and faster resolution of nonviable banks with limited state support (noted for Azerbaijan, Georgia, Kyrgyz Republic, Tajikistan). - Strengthening securities regulations and building local currency yield curves through regular sovereign issuance to foster capital market development. ### Monetary policy modernization (policy recommendations) - Fully modernize monetary policy frameworks to anchor inflation expectations and foster exchange rate flexibility: - Recent moves toward greater exchange rate flexibility have helped competitiveness but left unfinished monetary policy frameworks less effective in steering inflation expectations. - Complete the transition to more credible interest rate or rules-based frameworks (noted for Azerbaijan, Kyrgyz Republic, Tajikistan, Turkmenistan, Uzbekistan) once key conditions are in place. - Key conditions include ensuring central bank operational and financial independence and establishing the primacy of the inflation objective in a forward-looking strategy. - Develop adequate monetary instruments and forecasting capabilities (noted for Azerbaijan, Kazakhstan, Kyrgyz Republic, Tajikistan, Uzbekistan). - Address gaps in data and coordination with fiscal authorities to enhance central bank communication and anchor inflation expectations. - Deeper and more liquid domestic debt and foreign exchange markets would improve intermediation and monetary transmission. ### Fiscal consolidation and rebuilding buffers (policy recommendations) - Rebuild fiscal buffers through growth-friendly consolidation: - Continue efforts to widen the tax base, reduce exemptions, and make tax systems fairer. - Rationalize expenditures while protecting capital and social spending where public debt has increased sharply (example: Azerbaijan) or where the risk of debt distress is high (Tajikistan). - Fiscal consolidation may be needed where fiscal rule limits call for upgrading fiscal policy measures (Armenia) and where support for external adjustment and control of inflation is needed (Turkmenistan, Uzbekistan). - Manage fiscal risks and contingent liabilities through improved governance of state-owned enterprises. ### Private sector development and diversification (policy recommendations) - Promote private sector development and diversification by: - Accelerating structural reforms to foster diversification and private-sector-led inclusive growth. - Gradually reducing the role of the state in the economy to level the playing field and foster a more market-based system. - Streamlining regulations, strengthening legal frameworks, and improving tax systems. - With healthier banks and fully market-determined exchange rates, foster stronger links to global value chains, economic diversification, and higher medium-term growth potential. ### Governance and anti-corruption (policy recommendations) - Promote good governance and fight corruption: - Weak governance and corruption underlie the region’s legacy challenges and incomplete reforms. - Strengthen institutional frameworks and transparency in financial sector oversight, tax administration, public financial management, central bank governance and operations, and anti-corruption and anti-money-laundering frameworks. - Such reforms would reduce regulatory capture, improve public sector efficiency, raise revenue collection, and positively impact deficits, debt sustainability, and public service delivery. - The IMF has a new, enhanced framework for engagement on governance issues to promote systematic, effective, and candid engagement on macro-critical governance vulnerabilities; the IMF will be rolling out this framework in CCA countries in the coming year. ### Key CCA region economic indicators and projections (percent of GDP, unless otherwise indicated) - CCA (aggregate) - Real GDP (annual growth): Average 2000–15 = 7.8; 2016 = 2.7; 2017 = 4.9; 2018 = 4.2; 2019 = 4.1; 2020 = 4.1 - Current Account Balance: Average 2000–15 = 0.7; 2016 = –6.5; 2017 = –2.7; 2018 = 0.5; 2019 = –0.5; 2020 = –0.1 - Overall Fiscal Balance: Average 2000–15 = 1.9; 2016 = –3.5; 2017 = –3.8; 2018 = 0.4; 2019 = 0.5; 2020 = 0.8 - Inflation (year average; percent): Average 2000–15 = 8.8; 2016 = 10.4; 2017 = 9.1; 2018 = 8.2; 2019 = 7.8; 2020 = 6.4 - CCA oil and gas exporters (Azerbaijan, Kazakhstan, Turkmenistan, and Uzbekistan) - Real GDP (annual growth): Average 2000–15 = 8.1; 2016 = 2.7; 2017 = 4.8; 2018 = 4.1; 2019 = 4.0; 2020 = 4.1 - of which non-oil growth: Average 2000–15 = 8.3; 2016 = 1.1; 2017 = 2.9; 2018 = 3.9; 2019 = 3.9; 2020 = 3.9 - Current Account Balance: Average 2000–15 = 1.9; 2016 = –6.2; 2017 = –2.4; 2018 = 1.6; 2019 = 0.5; 2020 = 0.8 - Overall Fiscal Balance: Average 2000–15 = 2.7; 2016 = –3.2; 2017 = –3.7; 2018 = 0.8; 2019 = 1.0; 2020 = 1.3 - Inflation (year average; percent): Average 2000–15 = 9.0; 2016 = 11.5; 2017 = 9.6; 2018 = 8.9; 2019 = 8.3; 2020 = 6.6 - CCA oil and gas importers (Armenia, Georgia, the Kyrgyz Republic, and Tajikistan) - Real GDP (annual growth): Average 2000–15 = 6.2; 2016 = 3.5; 2017 = 6.0; 2018 = 5.1; 2019 = 4.5; 2020 = 4.5 - Current Account Balance: Average 2000–15 = –7.9; 2016 = –8.5; 2017 = –4.8; 2018 = –7.3; 2019 = –7.4; 2020 = –6.8 - Overall Fiscal Balance: Average 2000–15 = –2.9; 2016 = –5.4; 2017 = –4.3; 2018 = –2.5; 2019 = –3.0; 2020 = –2.7 - Inflation (year average; percent): Average 2000–15 = 7.0; 2016 = 1.8; 2017 = 4.5; 2018 = 2.7; 2019 = 3.4; 2020 = 4.1 *Source: Middle East and Central Asia Department REO Update, April 2019 (IMF staff calculations and projections).* --- _Source: https://www.imf.org/-/media/files/publications/reo/mcd-cca/2019/april/english/cca0419.pdf_