Georgia and Armenia might benefit from tourism and capital diverting from the Middle East, according to the latest International Monetary Fund (IMF) report.

The report notes that trade disruptions due to the war in the Middle East pose a serious risk to the region, but also emphasizes that some countries could gain some economic benefits from current developments.

“Trade disruptions from the war in the Middle East are the key risk for the region, with effects varying across countries as a function of their trade links with Iran and their economic specialization. The countries that are geographically closer to Iran are net commodity importers, and those that rely more on tourism are more vulnerable.

High import dependency and elevated inflation expose the region to rising global commodity and food prices. Prolonged inflation could force tighter policy stances, especially for oil importers. Heightened geopolitical uncertainty and tighter global financial conditions could reduce foreign investment and business confidence.

On the other hand, some countries, such as Armenia and Georgia, might benefit from tourism and capital diverting from the Middle East,” the IMF report said, in particular. It added, however, that the Caucasus and Central Asia economies remain exposed to further developments of the Ukraine war.