Europe Edge

Research evidence excerpt

Europe Edge

Nicolaie Alexandru-Chidesciuc (44 20) 7742-2466 Fatih Akcelik (44 20) 3493 7285 Europe Economic Research J P M O R G A Nnicolaie.alexandru@jpmorgan.com fatih.akcelik@jpmorgan.com

J.P. Morgan Securities plc 03 August 2026

Anatoliy A Shal (971) 4561-2005 Khamza Sharifzoda (44 20) 3493-3571

anatoliy.a.shal@jpmorgan.com khamza.sharifzoda@jpmorgan.com

Europe Edge Azerbaijan and Türkiye—though Moody's baseline does not

assume a formal peace treaty—and improvements in econom-

This is an extract from the EM Edge Data Watch. For the full ic fundamentals, particularly lower unemployment, narrower

publication and thematic essay please use this link fiscal deficits, and deeper domestic capital markets.

• Armenia: Moody’s revised its outlook to positive. Trade In our view, normalization between Armenia and Azerbaijan

deficit widened in 2Q26, but FX reserves kept rising to will continue, even though Prime Minister Pashinyan’s Civil

USD 5.7 bn. The share of non-residents in the local debt Contract party failed to retain the parliamentary super-majori-

market has grown to 11% (USD 0.8 bn) ty that would have mechanically eased the conclusion of a

• Azerbaijan: CBRA stays on hold at 6.5%, sounds hawkish peace deal with Azerbaijan. Baku has deepened its engage-

ment with Yerevan in recent months, most notably when

• Georgia: NBG leaves the policy rate at 8.25%; output Azerbaijani presidential aide Hikmet Hajiev, one of the most

growth has accelerated to 7.9% oya in 1H26.

influential figures in the government, made a historic working

• Kyrgyzstan: Output growth accelerated to 11.9% in 2Q26. visit to Armenia.

Headline CPI in June stood at 11%; services inflation

remains sticky. NBKR kept the policy rate on hold at Amid intensifying pressure from the Kremlin, Pashinyan may