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Pandemic reduces oil-dependent economies by 3.4% to 4.3%

Pandemic reduces oil-dependent economies by 3.4% to 4.3%
Pandemic reduces oil-dependent economies by 3.4% to 4.3%

Oil-dependent economies shrunk by 3.4-4.3% in 2020, the Galt and Taggart economic review of the region reveals.

Analysts say the drop in oil prices was an additional blow to the oil-exporting countries - Azerbaijan, Kazakhstan, and Russia. Nevertheless, high foreign reserves, low debt, and a fiscal aid package proved to be enough to deal with the economic shock of the pandemic.

According to them, the supply-demand delay caused by the pandemic was behind unprecedented fluctuations in the financial markets. According to the IMF, in March-April 2020, after the start of the pandemic, capital outflows from the Caucasus and Central Asia amounted to $ 500-600 million, leading to the depreciation of local currencies in the region.

"As a result of the demand shock, world oil prices fell to $ 37 in April of 2020. However, oil-producing countries' cuts in production soon pushed oil prices back to the $ 30-40 mark. Oil prices have reached $ 50 by the end of 2020," the report said.

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