JAN. 11 2023 (The Bulletin) — London-listed Steppe Cement said that high inflation in Kazakhstan would hit its profit in 2022, forcing its share price to drop by 15%. The announcement was significant because it was one of the first times that business has admitted that high inflation in Kazakhstan, at 20%, is hurting it.
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— This story was published in issue 532 of the Central Asia & South Caucasus Bulletin, on Jan. 16 2023
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OCT. 25/27 2021 (The Bulletin) — The Georgian and Kyrgyz central banks both decided to keep their interest rates steady but warned that accelerating inflation may force more rises. Georgia raised its interest rate to a 13-year high of 10% in August. It said that inflation was now measuring around 12%. As for Kyrgyzstan, it kept its interest rate at 7.5% and said that external factors were driving inflation.
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— This story was published in issue 505 of the Central Asia & South Caucasus Bulletin, on Oct. 28 2021
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OCT. 25 2021 (The Bulletin) — Armenia will increase its defence spending by 11% to 345b dram ($720m) from 2022, PM Nikol Pashinyan told parliament. Mr Pashinyan has had to respond to accusations that the Armenian army was underfunded and under-armed when it lost a war last year to Azerbaijan over Nagorno-Karabakh. His opponents said that 11% is not a big enough rise and pointed out that Azerbaijan’s annual military budget in 2021 had been around $2.6b.
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— This story was published in issue 505 of the Central Asia & South Caucasus Bulletin, on Oct. 28 2021
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OCT. 25 2021 (The Bulletin) — Armenia and Iran agreed to build a stretch of road that avoids crossing through territory now controlled by Azerbaijan and to smooth customs regulations, Iranian media quoted Iranian officials as saying. The deal is considered significant as it underlines the neighbours’ commitment to each other despite pressure from Azerbaijan to break up the alliance. It now controls a 20km stretch of road that it captured after defeating Armenia in a war for Nagorno-Karabakh last year.
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— This story was published in issue 505 of the Central Asia & South Caucasus Bulletin, on Oct. 28 2021
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ALMATY/OCT. 25 2021 (The Bulletin) — The Kazakh and Tajik Central Banks both raised their interest rates to try to dampen soaring inflation.
Commenting on pushing Kazakhstan’s interest rate up by a quarter of a percentage point to 9.75%, its highest level since April 2020, the Kazakh Central Bank said that annualised inflation hit 8.9% in September.
“The external inflation situation remains unfavourable. This is due to high world food prices, supply disruptions, rising costs of transportation, raw materials and energy, as well as the recovery of domestic demand,” it said.
On a more positive note, the Central Bank said that retail had started to recover after an easing off of the coronavirus pandemic.
In Dushanbe, the Central Bank raised its interest rate to 13.25% from 13%. It also said that inflation measured 9.6%, double its official target.
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— This story was published in issue 505 of the Central Asia & South Caucasus Bulletin, on Oct. 28 2021
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OCT. 21 2021 (The Bulletin) — Uzbekistan’s Central Bank said that inflation in September was 10.8%, higher than its baseline scenario forecast. Importantly, it said that food and energy prices, two of the main expenses for ordinary people, have risen faster, with food prices jumping by 14.4% and energy prices rising by 23%. Inflation in the region is eating into GDP rates and economists have said that it is acting as a brake on growth.
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— This story was published in issue 505 of the Central Asia & South Caucasus Bulletin, on Oct. 28 2021
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JULY 22 2021 (The Bulletin) — The IMF said in its latest economic assessment that it expected Georgia’s economy to grow by 7.7% this year, underlining its sharp recovery from the impact of the coronavirus pandemic. Economists have said that the major concern for Georgia’s economy is inflation. The Central Bank said that it was running at nearly 10% last month.
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— This story was published in issue 493 of the Central Asia & South Caucasus Bulletin, on July 22 2021
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JULY 22 2021 (The Bulletin) — Data published by Uzbekistan’s State Statistics Committee said that output at Uzbek industries was 8.5% higher in the first six months of the year compared to the same period in 2020. Most metrics in the Statistic Committee’s twice-a-year data release showed that Uzbek the economy was growing. The one sector that didn’t show much of an increase was construction, a key driver of the economy, which showed growth compared to the same period in 2020 of just 0.1%.
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— This story was published in issue 493 of the Central Asia & South Caucasus Bulletin, on July 22 2021
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BAKU/JULY 17 2021 (The Bulletin) — Commercial banks in Azerbaijan are limiting foreign currency sales to try to prevent a fall in the value of the manat currency, the Bloomberg news agency reported.
It quoted several residents of Baku who said that they had tried to change manat into US dollars at commercial banks but had been told that the Central Bank had banned it. Azerbaijani media has been reporting on currency exchange limits for much of the year.
In an emailed response to Bloomberg’s questions on the blocking of foreign currency sales, the Central Bank was quoted as denying that this was a formal policy and that it instead promoted a “liberal” currency exchange.
But the Central Bank has maintained a tight peg on the value of the manat for the past five years, ever since it was bounced into two consecutive devaluations in 2015, linked to the oil price collapse of 2014, which damaged its reputation for competence.
Both the Georgian lari and the Armenian lari lost around 15% of their value at the start of the global coronavirus pandemic, and its associated lockdowns, last year. By contrast the Azerbaijani Central Bank maintained the value of the manat at 1.6995/$1. Analysts have said, though, that the pressure to devalue has been growing.
In January 2016, shortly after devaluing the manat for the second time, the Central Bank also brought in rules which temporarily stopped currency traders from buying or selling currencies.
>>See P.8 for currency market news
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— This story was published in issue 493 of the Central Asia & South Caucasus Bulletin, on July 22 2021
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JUNE 15 2021 (The Bulletin) — The World Bank called out the Turkmen government for publishing misleading economic data and dropped its global economic outlook report.
This is the second time that the World Bank has dropped Turkmenistan from its bi-annual Global Economic Prospects report, and its damaging assessment of the quality of Turkmen data will reinforce Turkmenistan’s reputation as a difficult place to do business.
The only other country excluded from the World Bank’s Global Economic Prospects report, published this month, was Venezuela.
“Due to lack of reliable data of adequate quality, the World Bank is currently not publishing economic output, income, or growth data for Turkmenistan and República Bolivariana de Venezuela,” it wrote in a footnote. “Turkmenistan and República Bolivariana de Venezuela are excluded from cross-country macroeconomic aggregates.”
The footnote is identical to one included in the January edition of the report.
Turkmen opposition groups have said the country is suffering an economic crisis, with inflation spiralling out of control and food queues lengthening. Not that you would realise this from the official data which paints a rosy picture.
In 2020, though, the IMF refused to include Turkmenistan in its Growth Outlook report because of poor data quality. Most economists have also predicted Turkmen GDP growth to be around 1% this year, compared to a Turkmen government estimate of 5.9%.
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— This story was published in issue 48 of the Central Asia & South Caucasus Bulletin, on June 16 2021
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