Tag Archives: economy

Uzbekistan’s acting-president signals changes to currency controls

NOV. 29 2016 (The Conway Bulletin) — Uzbekistan’s acting-president Shavkat Mirziyoyev published a draft decree on the presidential website laying out what appeared to be a manifesto to liberalise some of the tightest currency controls in the world.

In the draft decree, Mr Mirziyoyev wrote that restrictions would be lifted on foreign companies working in Uzbekistan and on Uzbeks taking money out of the country.

The document said that the main aims of the reforms were to “stimulate growth of the country’s export potential, improve the competitive- ness of domestic producers in foreign and domestic markets” and to “create equal conditions for all participants of foreign economic activity during their foreign exchange operations and the prohibition of the practice of privileges and preferences to individual companies or sectors”.

Specifically, the document said Uzbeks would be allowed to take up to $10,000 out of the country. Currently, Uzbeks are banned from taking cash out of the country. Foreign companies working in Uzbekistan have also complained about restrictions on repatriating profits. Under the draft regulations this should be easier.

Uzbekistan also operates a dual exchange rate with the official and the Black Market rate varying widely.

The draft legislation on the presidential website didn’t specifically tackle the issue of the dual exchange rates but loosening currency controls should bring them together.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Azerbaijan’s GDP shrinks in Jan-Oct

NOV. 30 2016 (The Conway Bulletin) — Azerbaijan’s finance minister Samir Sharifov admitted in a parliamentary session that the country’s overall GDP had dropped by 3.7% between Jan. and Oct. this year. He also said, and this is important as Azerbaijan has said it wants to diversify away from oil and gas production, that the non-oil part of the economy had shrunk by over 6%. Azerbaijan has been badly hit by the fall in oil prices and a recession in Russia.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Stock market: Georgian lari and Azerbaijani manat

DEC. 2 2016 (The Conway Bulletin) — Currencies in the South Caucasus have declined sharply over the past few weeks after a slew of poor economic data and a strengthening US dollar.

The Georgian lari hit an all-time low on Tuesday, when it traded at 2.53/$1. A year ago it traded at 1.84/$1. In the past two months, it has fallen by 8%.

The government in Tbilisi said the slide was due to a negative trade balance and the strengthening US dollar. In what could have been a spiral effect, demand for US dollars within Georgia soared, as people feared a sharper depreciation of the national currency.

Macroeconomic statistics have shown that Georgia’s GDP growth has slowed in the past months, disappointing observers.

The Azerbaijani manat, the world’s worst-performing currency in 2015, has also depreciated against the US dollar, down 6.5% in the last 60 days. It traded at 1.73 on Thursday, down almost 40% compared to last year.

Azerbaijan’s banks also stopped selling US dollars due to shortages.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Economic growth halves in Georgia

NOV. 30 2016 (The Conway Bulletin) — Georgia’s year-on-year growth for the 12 months to the end of October more than halved to 1.3%, the Georgian statistics agency said. Georgia’s exports have fallen and its currency has weakened heavily in a regional economic downturn that has stunted growth and worried governments. For the 12 months to the end of October 2015, Georgia recorded GDP growth of 3%. Georgia, though, is faring better than its South Caucasus neighbours. Both Azerbaijan and Armenia’s economies have shrunk.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Utility prices rise in Azerbaijan

NOV. 28 2016 (The Conway Bulletin) — Azerbaijan’s state tariff committee which sets prices for utilities such as electricity, water and gas said that all fees would rise slightly. They said that overall inflation had pushed up prices across all sectors. The price rises are not expected to be drastic, a 2% rise in electricity prices is expected, but they will still irritate ordinary Azerbaijanis who have been dealing with a general economic slowdown for the past 2- 1/2 years.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

EBRD wants to increase investments in Kazakhstan

NOV. 30 2016 (The Conway Bulletin) — The European Bank for Reconstruction and Development (EBRD) pledged to increase its investment plans in Kazakhstan to $1b in 2017. So far in 2016, the EBRD has invested around $900m. At a meeting in Shymkent in Southern Kazakhstan, EBRD country director Janet Heckman also pledged increased investment in the utility sector.

ENDS

(News report from Issue No. 307, published on Dec. 2 2016)

Azerbaijan expects economic growth

NOV. 23 2016 (The Conway Bulletin) — Azerbaijan expects its economy to grow by 1% in 2017 and 1.5% in 2018, a draft budget from the government seen by Reuters showed. The day before, the World Bank reiterated that it expected the economy to contract by 3% this year. Azerbaijan has been particularly hard hit by falling oil prices. Its economy is particularly oil-dependent.

ENDS

(News report from Issue No. 306, published on Nov. 25 2016)

Kazakhs cut out imported luxury goods to beat tough economic times

ALMATY/TARAZ, Kazakhstan, NOV. 21 2016 (The Conway Bulletin) — A stubborn, painful economic downturn has wiped 4% off the average Kazakhs’ purchasing power, the ranking.kz website reported, forcing people to cut out luxury items — especially those imported from abroad.

Aiganym Dosmail, who works in an advertising agency in Almaty, said that she had cut out on buying luxury items that had been imported and ballooned in price since the devaluation of the tenge last year.

“I optimise my spending. Previously, I bought a lot of unnecessary stuff and now I buy only those goods that last long and are good quality. It is of course sad that previously marsh- mallows cost 300 tenge and now they cost 800 tenge,” she told the Bulletin.

The tenge lost half its value last year after the government reluctantly cut its peg to the US dollar. Low oil prices and a recession in Russia had pressured the Kazakh economy, and others across the region, into currency devaluations and budget cuts.

Worst hit are importers of luxury goods. Most Kazakhs now can’t afford to buy the foreign goods that they could afford even a year earlier.

Unlike Ms Dosmail, Aigerim Zhanuzak’s hairdressing salon in Taraz in the south of the country has been far less affected. She said that most of her clients are self-styled middle class Kazakhs and that she hasn’t had to put up her costs because she doesn’t have may import costs.

“My salon is targeting middle income and higher class people which means the crisis doesn’t impact people when it comes to personal comfort. People always want to eat and lto ook good,” she said. “If we talk about the financial crisis in our town then it has hit the lower-income population. Goods have become more expensive, public transport as well, but salaries have not increased, unfortunately.”

ENDS

(News report from Issue No. 306, published on Nov. 25 2016)

Armenian economy is broken, says new PM

NOV. 19 2016 (The Conway Bulletin) — Armenia’s economy is virtually broken and needs major reform if it is going to survive, the country’s new PM Karen Karapetyan told Bloomberg in an interview.

Parachuted into the job in September after a series of crises pushed trust and credibility in the previous PM to near breaking point, Mr Karapetyan is the former Gazprom executive and former mayor of Yerevan, who President Serzh Sargsyan has tasked with transforming the Armenian economy.

Corruption and the dominance of a handful of well-connected oligarchs, who control most of the lucrative import businesses, need to be countered, Mr Karapetyan said.

“We’re proposing the most rapid change that’s possible,” he said. “We will create an even, competitive, level- playing field.”

And the ruling Republican party needs to do something fairly radical if it is going to have any chance of holding on to parliament after an election in May. In July this year, hundreds of young Armenians clashed with police in support of a group of gunmen who had captured a police station, highlighting frustration with the government.

In the interview, Mr Karapetyan also said that he wanted to cut government spending to halve the state deficit, a difficult objective if you also need to win votes.

“We also have external debt growing faster than the GDP growth and growing faster than revenues,’’ he said.

ENDS

(News report from Issue No. 306, published on Nov. 25 2016)

Armenia to issue second bond

NOV. 18 2016 (The Conway Bulletin) — Armenia plans to issue its second ever eurobond by 2019 or 2020, finance minister Arshaluys Margaryan told Reuters. Mr Margaryan did not specify the size of the eurobond. Armenia issued its first eurobond in 2013. It was dubbed the Kardashian bond, after Armenian- American actress Kim Kardashian, and was valued at $700m.

ENDS

(News report from Issue No. 306, published on Nov. 25 2016)