Tag Archives: economy

Georgian C. Bank keeps rates steady

OCT. 26 2016 (The Conway Bulletin) — Georgia’s Central Bank kept its key interest rate at 6.5% but said that it would lower it to 6% by the end of Q1 2017. It said that inflation and both consumer and business demand had slowed but that it was too early to cut rates now as the economy was still dealing with a previous cut. Annualised inflation in September measured 0.1% compared to a target of 5%.

ENDS

(News report from Issue No. 302, published on Oct. 28 2016)

Kazakh economy minister says the worst is past

ALMATY, OCT. 25 2016 (The Conway Bulletin) — Kazakhstan’s economy minister Kuandyk Bishimbayev said that the worst of an economic downturn linked to a drop in oil prices and a recession in Russia had passed, the most significant upbeat statement from the Kazakh government in two years.

Specifically, Mr Bishimbayev said that the free float of the tenge last year, which triggered a collapse in its value, had been painful but was now driving the economy and making business more competitive.

“We believe that the most difficult period has been passed for Kazakhstan’s economy. We estimate that the period was in the first quarter of this year, it was the time of the lowest oil prices,” he said.

“There has been steady growth in the economy since June this year.”

Despite Mr Bishimbayev’s upbeat message, the data points to a still sluggish economy.

Economists have predicted that Kazakhstan’s GDP growth will contract this year to nearly zero. But with oil prices pushing back up to $55/barrel, double their value from the start of the year, officials have adopted a more upbeat narrative, even if caveats are dropped in.

Talking to parliament the following day, Mr Bishimbayev said that a more efficient tax collection system was needed to increase revenues from smaller businesses which had grown used to avoiding paying VAT and other taxes.

“If we want to continue to develop our systems, of course, a certain increase in the tax burden is needed, but not at the expense of those companies which already pay full taxes but at the expense of those who work outside the system,” media quoted him as saying.

Specifically, he said a third of small businesses don’t pay their full taxes.

ENDS

(News report from Issue No. 302, published on Oct. 28 2016)

Petrol prices rise by 35% in Uzbekistan

OCT. 24 2016 (The Conway Bulletin) — Uzbekistan increased the price of petrol by nearly 35%, underscoring the inflationary pressure built into its economy. State energy company Uzbekneftegaz said it was rising the price of a litre of AI-80 petrol to 2,800 soum from 2,075 soum. Other grades of petrol were given a similar price rise. Uzbekistan has been steadily increasingly the price of key items such as gas, electricity and petrol as the value of its soum currency falls, angering and frustrating ordinary people.

ENDS

(News report from Issue No. 302, published on Oct. 28 2016)

GDP growth slows in Turkmenistan

OCT. 21 2016 (The Conway Bulletin) — Turkmenistan’s GDP annualised growth slowed to 6.2% in the first nine months of the year, down from 7.5% during the same period in 2015, the Turkmen state news agency said. Turkmen official statistics are considered unreliable and the information leaking out of the country points to severe economic hardship. The data is valuable in highlighting the economic slow- down that Turkmenistan and its neighbours are dealing with.

ENDS

(News report from Issue No. 302, published on Oct. 28 2016)

Azerbaijan admits its GDP will shrink in 2016

OCT. 21 2016 (The Conway Bulletin) — Azerbaijan said that its economy would shrink in 2016 by 2.8%, a major reversal from its earlier insistence that it would avoid a recession and post growth of 1.8%.

Answering questions posted by Reuters, the Azerbaijani economy ministry blamed sluggish oil prices and low global growth for the GDP revision. Last week government data showed Azerbaijan’s GDP had contracted by nearly 4% in the first nine months of 2016.

“The growth at 1.8 percent was projected in 2015, when the International Monetary Fund had been projecting the oil price at $64/barrel,” Reuters quoted government officials as saying. Oil prices are now around $50/barrel, double the price in January.

Most economists have been predicting a recession in Azerbaijan this year and the reluctance to downgrade its own growth estimate has been seen by many as fanciful thinking that will damage the credibility of the Azerbaijani government.

According to the World Bank the last time that Azerbaijan’s GDP contracted was in 1995.

ENDS

(News report from Issue No. 302, published on Oct. 28 2016)

Azerbaijan’s GDP shrinks by 3.9%

OCT. 17 2016 (The Conway Bulletin) — Azerbaijan’s GDP shrank by 3.9% in the first nine months of the year compared to the same period in 2015, highlighting the heavy impact that a fall in the price of oil has had on the economy. The fall is roughly in line with analysts’ prediction. They had said that Azerbaijan is particularly exposed to the collapse in oil prices because it has not diversified its economy.

ENDS

(News report from Issue No. 301, published on Oct. 21 2016)

Car sales in Kazakhstan, a leading economic indicator, fail to pick up

ALMATY, OCT. 18 2016 (The Conway Bulletin) — Kazakhs bought just under 31,000 cars in the first nine months of the year, a drop of 59% compared to the same period last year.

The car market is a key indicator of Kazakhstan’s economic health and its collapse since an oil price crash in mid-2014 has mirrored the Kazakh economy. In Q1 2014, by comparison, Kazakhs bought 35,000 new cars, easily outstripping total sales for the first nine months of this year.

Analysts have said that consumers are not buying cars because of a 50% cut in the value of the tenge and higher inflation which have made them vastly more expensive.

Putting a positive spin on the news, Oleg Alfyorov, president of Kazavtoprom, the car industry union, said that he thought the market had bottomed-out and that sales would start to rise again soon.

“Kazakhstan’s car market has been in a state of recession since the second half of 2014. But this year, sales have reached a market plateau, from which retailers can start moving upwards,” he said.

Mr Alfyorov also pointed out the increased share of locally produced cars in total sales, which grew to 24%, almost double the share in 2014.

“Quarterly Kazakhs bought about 10,000 new cars. This figure has been stable since the beginning of the year.

At the same time, an increasing number of buyers preferred locally- assembled cars,” he said.

Still, this is a long way from where the industry was a few years ago when foreign car makers were eager to get a foothold in Kazakhstan’s growing manufacturing sector to launch into what they thought would be a lucrative Central Asian market.

ENDS

(News report from Issue No. 301, published on Oct. 21 2016)

Remittances grow in Georgia

OCT. 14 2016 (The Conway Bulletin) — Remittance data from Georgia showed an overall increase of 3.6% for the first nine months of the year compared to the same time in 2014, although cash from Russia continued to fall, media reported. Russia is the biggest source of remittances to Georgia, and the rest of the Central Asia and South Caucasus region. It sent only $282m to Georgia in Jan. – Sept., down 12.3%. Remittances from Greece stood at $93m (up 1%) and from the US at $89m (up 11%). The data is important because is shows that, unlike its South Caucasus and Central Asia neighbours, Georgia is not overly reliant on remittances from Russia.

ENDS

(News report from Issue No. 301, published on Oct. 21 2016)

Tajikistan increases trade with China

OCT. 20 2016 (The Conway Bulletin) — Tajikistan increased its trade with China by 32% in the first nine months of the year, its statistics agency said, highlighting its increased dependency on its near neighbour. Data said that Tajikistan-China trade turnover in this period was $700m, compared to Tajikistan-Russia trade turnover of $764m, which was down by 9.3%.

ENDS

(News report from Issue No. 301, published on Oct. 21 2016)

Kazakhs turn to credit cards

ALMATY, OCT. 18 2016 (The Conway Bulletin) — Kazakhs are spending more money on credit cards than ever before, new data showed, as they try to work out ways of pulling through a prolonged economic downturn.

Data from the rankings.kz website showed that the amount of credit cards in circulation in Kazakhstan had increased by 250% this year, a jump that suggests a large rise, too, in consumer debt.

Kuralai Abenova, a student in Almaty, was using her credit card to buy kit to renovate her apartment.

“It is very convenient rather than saving money. I can take a large sum of money and then pay little bits of it off regularly,” she said.

A crash in oil prices and a recession in Russia have hit Kazakhstan hard. The tenge currency has lost around 50% of its value since 2014 and inflation is rising.

Analysts have previously warned, though, that Kazakhs’ over-reliance on credit was a weakness that could undermine the economy. During the Global Economic Crisis of 2008/9, Kazakh banks were left with piles of bad debt. The risk is that similar amounts of bad debt are being accrued now.

And this loose attitude towards consumer debt is being replicated in high street shops which are encouraging shoppers to spend through cheap loans.

Saida Zhunusova, a financial consultant at the electronics store Technodom, said she had seen a large increase in the number of people using credit cards or asking directly for credit to pay for products.

“Many people cannot pay for the goods with cash and it is more convenient for them to pay only a part of the cost. Compared to 2014-2015 our sales have doubled because of loans,” she said.

ENDS

(News report from Issue No. 301, published on Oct. 21 2016)