Tag Archives: economy

IMF downgrades Georgia’s economic growth

NOV. 24 2016 (The Conway Bulletin) — The IMF downgraded Georgia’s economic growth to 2.7% this year, from an earlier estimate of 3.4%. The downgrade was due, it said to a slightly bigger than expected drop in remittances and exports. It also downgraded growth in 2017 to 4% from 5.2%. Like the rest of the region, a recession in Russia and falling currency values have hit Georgia’s economy.

ENDS

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

Tajikistan’s debt to GDP ratio rises

NOV. 16 2016 (The Conway Bulletin) — In a speech to parliament to present the government’s budget plans for 2017, Tajikistan’s finance minister Abdusalom Kurboniyon said that the government’s debt measured 36.3% of its GDP, slightly higher than last year. Tajikistan’s debt ratio has been rising over the past couple of years because of an economic downturn triggered by a fall in oil prices and a recession in Russia. In 2014, Tajikistan’s debt to GDP ratio had been around 28%.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Armenia cuts interest rate

NOV. 15 2016 (The Conway Bulletin) — Armenia’s Central Bank cut its key interest rate by 0.25% to 6.5%, its lowest level since at least 201. The Central Bank has been steadily cutting interest rates throughout the year to try to combat falling inflation. At the start of the year, Armenia’s interest rate had been set at 8.75%. The Central Bank said that economic activity was still slow and that it expected soft inflationary pressures to continue.

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(News report from Issue No. 305, published on Nov. 18 2016)

Comment: Kazakh electricity plans

NOV. 18 2016 (The Conway Bulletin) — The Kazakh government has cancelled plans to build either a thermal or nuclear power station despite saying for the past decade that an upgrade to its power generating system was vital.

At a press briefing earlier this month in Astana, Kazakh Energy Minister Kanat Bozumbayev said that, despite predictions of the opposite, Kazakhstan actually now has a surplus of power.

“We see no deficit within the next seven years, so we see no [need to build] new facilities such as a nuclear power plant within the next seven years,” he said. This is an important statement for two reasons. Firstly Bozumbayev is doing future generations of Kazakhs a disservice. Secondly he is not being honest with this current generation of Kazakhs.

Both the short-termism and the dishonesty are worrying. Kazakhstan needs more power. Just ask people living in Almaty who have to deal with an increasing number of brownouts. As the country has modernised and grown wealthier, electricity consumption has soared. World Bank data showed that in 2013, Kazakhstan’s per capita electricity consumption was 4,892 kilowatt hours, up from a post-Soviet low in 1999 of 2,838 kilowatt hours.

At the same time, Kazakhstan’s population has grown from just under 15m people in 1999 to just over 17m people in 2015.

Kazakhstan prevaricated for years with various suitors over building a new nuclear power station, its Soviet-era nuclear power station had been decommissioned in 2001, but earlier this year said it had scrapped the idea.

In September, Kazakhstan and Korea’s Samsung also finally admitted that its mothballed $2.5b plan to build a coal-fired power station on the shores of Lake Balkhash to feed electricity to Almaty had also been scrapped.

And here’s the hard truth, the real reason that Kazakh officials said they don’t need a new power station is that Kazakhstan’s finances are currently not up to funding the construction of one.

Last year, Samsung Engineering CEO Park Jung-heum said he had mothballed the Balkhash thermal power project “because of an issue with the Kazakhstan government over the guaranteed purchase of the power to be produced from the project.”

Power generation plans in Kazakhstan have become the latest victim of the economic downturn. The government should admit this and lay plans to boost production as soon as they can afford to.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Kyrgyz exports fall

NOV. 10 2016 (The Conway Bulletin) — In the first nine months of the year, Kyrgyzstan said that its exports had fallen by 9% and imports by 4.5%. The data confirms the view that the economies of Central Asia are still being squeezed by an economic downturn triggered in 2014 by a drop in oil prices. The drop in oil prices tipped Russia’s economy into a recession. Russia is the regional economic driver.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Kazakhstan cuts interest rate

NOV. 14 2016 (The Conway Bulletin) — Kazakhstan cut its key interest rate by 50 basis points to 12%, its fourth cut since May, as it looked to give industry a boost. The Central Bank said more cuts were likely but that these came with a potential inflation risk. The Central Bank had raised rates to a high of 17% in February to counter inflation.

ENDS

(News report from Issue No. 305, published on Nov. 18 2016)

Deflation continues in Armenia

NOV. 9 2016 (The Conway Bulletin) — In the first ten months of 2016, consumer prices in Armenia decreased by 3.1%, the country’s Statistics Committee said. Importantly, food prices decreased by 6%. Deflation in the country has continued throughout the year, although October registered inflation of 0.5% compared to September. Low economic activity has depressed prices in Armenia and could hinder growth.

ENDS

(News report from Issue No. 304, published on Nov. 11 2016)

Reserves drop in Kazakhstan

NOV. 10 2016 (The Conway Bulletin) — Kazakhstan’s Central Bank said its international reserves fell by 2.9% in October to $30.5b, the first decline in four months. Since the beginning of the year, reserves have grown by 13.8%, the Central Bank said. Last year the Central Bank spent a large proportion of its reserves trying to prop up its currency. This year, though, under a new Central Bank chief, the strategy has changed and the Bank has stepped away from intervention.

ENDS

(News report from Issue No. 304, published on Nov. 11 2016)

Kazakhstan to subsidise mortgages

ALMATY, NOV. 8 2016 (The Conway Bulletin) — The Kazakh government will gives subsidies of 15m tenge ($43,455) to mortgages for new homes, Marat Idryshev, head of the Association of Kazakh Constructors said, part of President Nursultan Nazarbayev’s plan to breathe life into Kazakhstan’s flatlining economy.

Mr Nazarbayev announced the Nurly Zher programme in September, the name means Bright Land in Kazakh, a few months after a series of unprecedented anti- government protests focused on mortgages and land ownership showed just how frustrated ordinary Kazakhs were with the state of the economy.

Precise details of the $1.3b plan to re-energise Kazakhstan’s construction sector have been thin, so Mr Idryshev’s comments are important. He said that the mortgage market was severely undernourished in Kazakhstan.

“Today the proportion of mortgages given by commercial banks in Kazakhstan is no higher than 5%,” he told media. “In Russia it is 50-70%, a world standard. We will act in accordance with the experience of our neighbours. The government will subsidise mortgages.”

The subsidy should, Mr Idtzhev said, bring interest on mortgages down to around 10% from 17%.

The collapse of the tenge last year made it difficult for mortgage holders to pay back their loans. Almaty-based economist Zharas Akhmetov said the plan should dampen growing tension.

“This, firstly, will support the housing market. Secondly, this will remove tension in society,” he told the Bulletin. “One of the drivers of economic growth is construction, and not only construction of houses but also roads and industrial objects.”

ENDS

(News report from Issue No. 304, published on Nov. 11 2016)

Azerbaijan and Georgia pledge closer economic ties

OCT. 27/28 2016 (The Conway Bulletin) — Under orders from Azerbaijani President Ilham Aliyev to seek out more economic opportunities, economic development minister, Shahin Mustafayev, travelled to Tbilisi to meet his counterparts and mull over various deals.

The meeting is important because it shows how Azerbaijan is looking to boost economic links with its immediate neighbours to help it through an economic downturn. As well as increasing trade with Georgia, Azerbaijan has reached out to Iran and Russia.

Official data showed that last year Azerbaijan invested a record $500m into Georgia’s economy. SOCAR, its state-owned energy company, is one of the most highly visible brands in Georgia with 120 fuel filling stations. Pipeline politics have also brought the two neighbours closer. Georgia is a host country for various oil and gas pipelines running from Azerbaijan’s Caspian Sea coast to Turkey and Europe.

And after their meeting in Tbilisi, Georgian officials said that they expected trade between the two countries to increase further.

“Businessmen of Azerbaijan and Georgia will soon start joint business projects to move forward the economy of the two countries,” media quoted Maya Mikeladze, a Georgian Presidential adviser, as saying.

Analysts were more cautious, though. Natig Jafarli, an Azerbaijani economist and opposition activist, said that in current economic conditions a boost in business deals was unlikely. Georgia was still important to Azerbaijan, though.

“Georgia is a window to Europe for Azerbaijan and a major transit corridor,” he said. “Baku will continue to play a vital role in the economy of Georgia.”

ENDS

(News report from Issue No. 303, published on Nov. 4 2016)