1. Outlook and Reforms to Promote Inclusive and Sustainable Growth Azim Sadikov Resident Representative Armenia, Azerbaijan, Belarus, Georgia, Moldova, and Ukraine

2. 2 Global Growth: Moderate and Uneven WorldU.S. Euro Area Emerging Markets Emerging Europe ChinaRussia 20143.42.40.94.62.87.30.6 20153.12.61.54.03.06.8-3.8 20163.62.81.64.53.06.3-0.6

3. 3 Shock 1: Lower Prices of Oil and Other Key Commodities Global Commodity Prices (Index Values, 2005=100) Source: IMF Primary Commodity Prices database. 1/ Simple average of Brent, Dubai Fateh, and West Texas Intermediate prices. Average Petroleum Spot Price (US dollars a barrel)

4. 4 Shock 2: Slowdown in Russia Real growth in Russia (Percent)

5. 5 Russian Ruble, U.S. Dollar, and Oil Prices (Indices, Jan. 1, 2014 = 100) Shock 3: Exchange Rate Movements Sources: National authorities; Bloomberg; and IMF staff calculations. 1/ Simple average of Brent, Dubai Fateh, and West Texas Intermediate prices.

6. Amid A Tough External Environment, Economic Growth Slowed in 2015 6

7. Large and Persistent Current Account Deficits are a Key Source of Vulnerability 7

8. Despite Strong Growth in the past, Unemployment Remains High 8

9. 9 Scope to Improve Competitiveness and Governance

10. Growth Sustainable Need an Economic Model that Promotes Diverse High Inclusive Growth 10

11. Macro- economic stability Promote trade integration Enhance sector reforms Invest in infrastructure Expand access to finance Improve the business climate Address skills mismatches Bold Reforms to Generate Growth and Create Jobs

12. 12 Access to Finance Top three obstacles to firms’ operations