Tag Archives: economy

Armenia raises interest rates, again

>>Inflation and Russian rouble devaluation are pressuring Armenian Central Bank>>

FEB. 10 2015 (The Conway Bulletin) — Armenia’s Central Bank increased its key interest rate to 10.5% from 9.5%, the third rate rise since December, because of rising inflation.

Data from the Central Bank showed that annualised inflation hit 4.3% in January which is at the top end of the government’s target range.

Central Banks across Central Asia and the South Caucasus have steadily been increasing interest rates to keep pace with Russian monetary moves. Russia is trying to defend its currency against both falling oil prices and the impact of sanctions.

Armenia’s economy is particularly tied into Russia’s economy. At the beginning of the year, Armenia also joined the Kremlin-lead Eurasian Economic Union which many see as a Moscow inspired political union.

Inflation in Russia has hit around 12% and is still rising. Economists said this would undoubtedly push the price of goods in Armenia up too.

Before the Central Bank raised interest rates in December, the Armenia’s interest rate had stood at 6.75%.
ENDS

(News report from Issue No. 218, published on Feb. 11 2015)

Kazakh gold/FX reserves increase

FEB. 6 2015 (The Conway Bulletin) — Kazakhstan’s net gold and foreign currency reserves increased to $28.2b in January from $28b in December and $24b from a year earlier, highlighting its ability to fight downward pressure on its tenge currency. Kazakhs worry about another devaluation.
ENDS

(News report from Issue No. 218, published on Feb. 11 2015)

EBRD AGM heading to Georgia

FEB. 10 2015 (The Conway Bulletin) — The European Bank for Reconstruction and Development has agreed to hold its AGM in Tbilisi in 2015. This will be the EBRD’s 24th AGM and the first to be held in the South Caucasus. For Georgia, the EBRD’s AGM gives it an opportunity to showcase Tbilisi.
ENDS

(News report from Issue No. 218, published on Feb. 11 2015)

Kazakhs protest against falling tenge

FEB. 9 2015 (The Conway Bulletin) — A handful of residents in Almaty staged another protest against the falling value of the Kazakh tenge. According to a Radio Free Europe report the protesters said they had taken out mortgages when $1 equalled 107 tenge. Now $1 equalled 186 tenge. Protests are rare in Kazakhstan but pressure on the tenge has angered people.
ENDS

(News report from Issue No. 218, published on Feb. 11 2015)

Georgia cuts growth rate

>>Russian woes continue to weigh on South Caucasus region>>

FEB. 6 2015 (The Conway Bulletin) — Georgia became the latest country in the South Caucasus/Central Asia region to downgrade its economic forecast for this year.

Finance minister Nodar Khaduri said growth would measure 4% in 2015, down from an earlier prediction of 5%.
Like its neighbours, the slowdown in Russia’s economy is also impacting on Georgia.

“Economic growth in Armenia and Moldova this year was zero percent. A drop is expected in economic growth in Ukraine and Russia due to well-known reasons,” media quoted him as saying.

Georgia’s economy is slightly better sheltered from the economic storm swirling around Russia. The depressed state of the Russian economy has hit Armenia hard and the fall in the price of oil has dented Azerbaijan’s economy.

Georgia, though, is not reliant on either the Russian economy nor on oil prices. That said, both still filter through and impact Georgia.

The Georgian Central Bank has already said it will likely raise interest rates later this month to try and combat the falling value of its lari currency.

“Considering the challenges in the economy today and analysing the numbers and data it is necessary that we start to revise the 5% growth prognosis and plan macroeconomic and fiscal indicators from the beginning so they adequately reflect the economic policy, and respond to these challenges,”” Mr Khaduri said.
ENDS

(News report from Issue No. 218, published on Feb. 11 2015)

Tajikistan needs to improve labour

>>World Bank says Tajikistan needs to adapt>>

FEB. 4 2015 (The Conway Bulletin) — In a report on Tajikistan, the World Bank said a third of Tajik men leave the country to find work and that the informal market employs about 60% of the population.

Adapting local labour training to a market that needs analytical skills and not just manual work is key to developing Tajikistan’s workforce, the World Bank wrote.

The migration numbers and the large informal economy mean the Tajik economy is fragile, especially when its main driver — the Russian economy is also under stress.

The Tajik Central Bank has raised interest rates and depleted its currency reserves in an attempt to defend its currency from a sharp devaluation. It has warned that it can’t sustain a long, second defence of its economy.

In its report, entitled “The Skills Road: Skills for Employability in Tajikistan”, the World Bank argued that the Tajik economy is undergoing significant changes that need a new approach from the government to develop more and better analytical skills to boost the formal sector of the economy and also reduce migration trends.

“New economy skills are strong analytical and organizational skills, including non-routine cognitive analytical and interpersonal skills,” the World Bank wrote.

“The report’s conclusion is that the government could shift the focus from providing access to educational institutions and instead focus on providing the skills (cognitive, non-cognitive, and technical) to students who need to succeed as adults.”
ENDS

(News report from Issue No. 218, published on Feb. 11 2015)

Kyrgyz inflation hits 10%

JAN. 29 2015 (The Conway Bulletin) — Inflation in Kyrgyzstan has broken through the 10% barrier, a senior official at the national statistics office was quoted by media as saying. The official, Malika Abdukadirova, said annualised inflation hit 10.4% in December mainly because of a rise in the price of foodstuffs.
ENDS

(News report from Issue No. 217, published on Feb. 4 2015)

Azerbaijan cancels social projects

>>Fall in oil price has hit Azerbaijan hard

JAN. 29 2015 (The Conway Bulletin) — Azerbaijan’s government has cancelled a $100m project to provide rural communities with vastly improved and faster internet, media reported.

The fall in the price of oil prices has hit Azerbaijan hard. It is very much a petro-dollar economy and has had to adjust its budget to account for falling revenues.

The project was supposed to be funded by the state budget but it was, instead, one of the first to be cut when the budget was re-organised earlier this year.

And the project was supposed to be a major stepping stone to build a more integrated, connected society. Research in 2013 showed that only 500 of Azerbaijan’s 4,000 villages had access to the internet, a figure the government’s programme was supposed to improve.

Another project that the government has apparently reduced funding for is the Star refinery that it was building in Turkey. Instead, media reported, the Star oil refinery will be funded by foreign-backed debt.

Oil prices are critical to Azerbaijan. Last week BP, the biggest foreign investor in Azerbaijan, said that it was making 8% of its local workforce redundant.

The next few months are going to be important. While prices remain low, there could be more project cancellations to come.
ENDS

(News report from Issue No. 217, published on Feb. 4 2015)

Azerbaijan’s ratings downgraded

JAN. 30 2015 (The Conway Bulletin) — The ratings agency Standard & Poor’s downgraded Azerbaijan’s debt rating to negative from stable because of the fall in oil prices. It said 44% of Azerbaijan’s GDP and 95% of its exports were linked to the energy industry. Despite calls from various foreign institutions, Azerbaijan has failed to diversify.
ENDS

(News report from Issue No. 217, published on Feb. 4 2015)

Berdy worries about the economy

JAN. 30 2015 (The Conway Bulletin) — Perhaps even the phlegmatic Turkmen president Kurbanguly Berdymukhamedov is beginning to become unnerved by the sudden drop in energy prices. Media reported that he held an unprecedented TV broadcast in which he explained to ordinary Turkmens how he had been forced to devalue the manat currency (Jan. 30).
ENDS

(News report from Issue No. 217, published on Feb. 4 2015)