Growth in Central Asia is expected to decelerate significantly in 2015-16 compared with 2014 on account of lower commodity prices and the region’s strong economic ties with Russia, while Armenia, Azerbaijan and Georgia are expected to post low single-digit growth, the EBRD says in its latest Regional Economic Prospects report.

A sharper-than-expected deceleration in China would also spark renewed volatility and a loss of confidence in emerging markets more broadly, and increase downward pressures on commodity prices. This will directly affect the regional countries, while a significant further decline in oil prices would intensify pressures on the Russian economy, with negative spill-overs for the economies in the Caucasus and Central Asia, the report predicts.

From its May report the EBRD improved forecasts for Armenia by 3.8 percentage points and now predicts 2.3% growth in 2015, for Azerbaijan by 1.5 percentage points to 3%, for Georgia 0.2 percentage points to 2.5%, for Kyrgyzstan by 2 percentage points to 5%, for Tajikistan 1.2 percentage points to 5% and for Uzbekistan 0.5 percentage points to 7.5%.

For the region’s largest economy, Kazakhstan, the EBRD lowered forecasts by 0.3 percentage points to 1.2%. The other two resources-dependent economies, Mongolia and Turkmenistan, also had their growth forecasts reduced: by 0.7 percentage points to 3.3% for the former and by one percentage point to 8.5% for the latter.