Impact of Oil Prices on Oil Exporting Countries in the Caucasus and Central Asia

Abstract

After a period of relative stability in mid- 2014, oil prices began to decrease, and this affected the economy of the oil exporting countries. The decrease in oil prices had an impact on the economy of oil exporting countries, exposing them to risk as a result of the reduced export revenues. The effects of the decrease in oil prices on the economy of oil exporting and oil importing countries is different. The paper studies the effects of decreasing oil prices on economic growth, exchange rate sustainability and fiscal stability of the oil exporting countries in Caucasus and Central Asia. The forecasts anticipate recovery of the oil prices in 2016 but the uncertainty of oil revenues continues to be a challenge for the economy of oil exporting countries.