World Bank says Armenia-Azerbaijan peace process key for regional outlook

The World Bank said it expects the peace agreement initialled between Armenia and Azerbaijan in August 2025 to contribute to greater stability and deeper regional integration.

In its January edition of the Global Economic Prospects report, the World Bank noted that progress in the Armenia-Azerbaijan peace process could support deeper economic integration in the South Caucasus.

The report warned that geopolitical tensions remain a key risk to the economic outlook for Europe and Central Asia, with risk and uncertainty levels remaining elevated above pre-conflict levels.

The bank said a prolonged or escalating war in Ukraine could further weaken Ukraine’s economy and sustain high geopolitical uncertainty.

At the same time, potential setbacks in the Armenia-Azerbaijan peace process would heighten downside risks for the region, while an earlier-than-expected end to hostilities in Ukraine could accelerate reconstruction investment and boost investor confidence.