TOPIC OF THE WEEK: Current accounts posted further gains in 3Q25, reinforcing improvement in external buffers

CAUCASUS / CENTRAL ASIA - Report 16 Jan 2026 by Ivan Tchakarov

Wading through BoP data may not be the most exciting thing in economic analysis, including because it is quite backward looking, but in my mostly frontier countries it helps elucidate key insights on the external side. The 3Q25 data for the CCA space has now been published for all economies save for Kyrgyzstan (as always, I will discuss this separately once it becomes available) and it shows that the regional current account (CA) position remained strong in the third quarter of 2025, amounting to an 0.8-percent-of-GDP surplus (on a 4-q ma basis). Excluding the only energy exporter in the sample, Azerbaijan, yields a similarly improving picture, with the CA position transitioning from a deficit of 0.5 percent of GDP (2Q25) to a gap of only 0.3 percent of GDP (3Q25).

As always, there was a divergence in individual country performance, but what stands out in particular is the continuing extraordinarily strong CA position of Uzbekistan and Tajikistan in the quarter. The former registered only a minor deficit, while the latter posted a hefty 15.4-percent-of-GDP surplus. It is thus not surprising that it is exactly the currencies of those two countries that appreciated the most vs. the US$ last year. In turn, these CA surpluses were generated by copious remittances, chiefly from Russia, and strong support provided by commodity prices, including gold. Georgia also posted a surplus in the quarter driven by strong tourist inflows. Armenia continued with a CA deficit, although it improved relative to the first half of the year. Azerbaijan unsurprisingly posted a CA surplus, although it has been under pressure due to lower oil prices.

All countries have also pressed on with reserve accumulation, with Uzbekistan leading the pack, including because of rising gold prices. However, Armenia, Georgia, Azerbaijan and Tajikistan have also boosted their FX buffers, albeit for different reasons.

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