Tbilisi (GBC) -  The Caucasus and Central Asia received major inflows of money, businesses and people. More than 1 million individuals, including highly skilled professionals, are estimated to have left Russia in the past two years (estimates of emigration vary considerably). 

Many chose to relocate to the Caucasus and Central Asia, taking advantage of linguistic and cultural proximity and the relative ease of gaining residence and opening bank accounts. The smaller CCA countries, in particular, saw larger increases in the share of Russian migrants relative to their overall populations, with new arrivals in 2022 accounting, for instance, for 3 per cent of Georgia’s population and 2.5 per cent of Armenia’s Growth in the Caucasus is forecast to be moderate at 4.1 per cent in 2024 before settling closer to 3.5 per cent in 2025, a level in line with estimates of medium-term potential growth.

For instance, Georgia is estimated to have received more than 20,000 Russian tech professionals and more than 21,000 legal entities (firms) were established by Russian entrepreneurs between March 2022 and July 2023. . Given the relative ease of opening bank accounts in the region, around 500,000 bank accounts have been opened by Russian visitors and migrants to Kazakhstan since the start of the war, while 100,000 have been opened in Georgia.

The main risks arise from geopolitical instability in the region and domestic political polarisation. Potential progress concerning the country’s EU candidate status, in contrast, could create a more stable environment and stimulate growth-supporting reforms.