The current account deficit remains a concern
Overview:
The economic recovery seems fairly robust despite a poor third quarter. Agricultural output dropped sharply but industrial production growth remains healthy. The government has agreed a new program with the IMF that foresees both fiscal consolidation and the implementation of structural reforms. The authorities have a fairly good track record on the former (notwithstanding an inevitable fiscal deterioration during the recent downturn). The urgency with which reforms must strengthen the export base and improve the business climate more generally are emphasized by the weak current account position. The current account deficit remained large throughout the global financial crisis and is increasing. Little progress has been made on Nagorno-Karabakh and the situation on the ground is tense.