Tag Archives: economy

Cash shortage spreads to Uzbek capital

MAY 2 2016 (The Conway Bulletin) – Several employees at state-owned companies in Tashkent have not received payment since February, according to sources interviewed by Eurasianet. This is a sign that a shortage of hard currency, previously confined to the provinces, has spread to Uzbekistan’s capital. Wage arrears cause distress among the population. Last year, a leaked letter from the Central Bank revealed a shortfall of 1.5 trillion sum ($517m at the official rate) in the state budget.

ENDS

(News report from Issue No. 279, published on May 6 2016)

Georgian CBank intervenes, again

MAY 5 2016 (The Conway Bulletin) – Georgia’s Central Bank intervened in the currency market for the sixth time in two months, in an effort to dampen the appreciation of its lari currency. The Central Bank bought $20m, injecting lari into the market. The intervention came as the lari reached 2.21/$1, its strongest rate since July 2015.

ENDS

(News report from Issue No. 279, published on May 6 2016)

Kazakhstan’s CBank cuts interest rate as inflation begins to slow

MAY 5 2016, ALMATY (The Conway Bulletin) — Kazakhstan’s Central Bank cut its key interest rate by two percentage points to 15% because it said that inflation was slowing and the overall economic outlook was improving.

The consumer price index grew in April to an annualised rate of 16.3%, its highest since 2009, but the Central Bank said that the pace of inflation had slowed.

“Seasonally adjusted, annualised month-on-month inflation for each of the last three months was within the target range for the annual inflation set between 6% and 8%,” the Central Bank said in a statement linked to its rate change.

“A survey of households also showed that expectations of inflation have subsided as well.”

After months of poor economic data and a 50% devaluation of the tenge currency, any prognosis on Kazakhstan’s economy which is even vaguely positive will be seized upon and lauded. This is the first time in months that Kazakhstan’s Central Bank has shown confidence in its ability to control the money market, a sign that the worst period of a regional economic downturn might be over.

Still, the Central Bank did add a large dash of caution to its outlook.

It said that a potential downside risk to the economy was the “increased tenge-denominated high interest rate liabilities” held by commercial banks, which could put pressure on the financial sector. This is, essentially, a reference to bad loans.

ENDS

(News report from Issue No. 279, published on May 6 2016)

Kyrgyzstan’s debt to GDP ratio grows

MAY 4 2016 (The Conway Bulletin) – Foreign debt has outpaced GDP growth in 2015 in Kyrgyzstan and pushed up the debt/GDP ratio to 70%, Edward Gemayel, IMF head of mission, told a press conference. Mr Gemayel also said that GDP growth will be 3% in 2016, lower than the 3.5% it registered in 2015. Debt/GDP ratio is a sensitive issue in Kyrgyzstan. In 2014, the IMF said, the ratio was around 45%.

ENDS

(News report from Issue No. 279, published on May 6 2016)

Kazakhstan’s PVC imports fall

APRIL 29 2016 (The Conway Bulletin) – Kazakhstan’s net import of unmixed polyvinyl chloride (PVC), a type of plastic, decreased by 21% in the first quarter of 2016, compared to the previous year. With a 99% market share, China is Kazakhstan’s main supplier of PVC. Declining imports are linked to Kazakhstan’s struggling petroleum-dependent economy.

ENDS

(News report from Issue No. 279, published on May 6 2016)

Turkmenistan’s economy needs reforming, says IMF

MAY 5 2016 (The Conway Bulletin) – Turkmenistan must push through more structural reforms of Soviet era policies and characteristics still embedded in its economy if it is to navigate its way through an economic storm that has hit the region, the IMF said after a mission to Ashgabat.

Turkmenistan’s economy grew 6.5% last year, the IMF said, but there is likely to be a slowdown in 2016 because its economy it too tightly linked to gas.

“2016 could see another slight slowdown in growth on the back of a broadly stagnant hydrocarbon economy and slowing (albeit still massive) investment,” the IMF said in a statement.

In its assessment, the IMF praised austerity measures taken by the government over the past 18 months to counter the impact of the economic downturn. In particular, it praised the devaluation of the manat currency and the decision to phase out subsidies to the population.

“A fundamental re-orientation of the economy through a further acceleration of wide-ranging structural reforms, including in the areas of business climate and governance, as well as market-driven diversification, offers the best way to boost future growth rates,” the IMF said.

Turkmenistan devalued its manat currency by 19% on New Year’s Day 2015, its first currency devaluation for seven years and this year it said that it would scrap much cherished state subsidies of utilities.

Both policy moves were designed to bolster Turkmenistan’s listing economy.

ENDS

(News report from Issue No. 279, published on May 6 2016)

Azerbaijan not to increase electricity tariffs, says S&P

APRIL 29 2016 (The Conway Bulletin) – International ratings agency Standard & Poor’s said that it doesn’t expect the Azerbaijani government to raise tariffs on electricity for fear of social unrest. S&P downgraded the state-owned electricity distributor, Azerenergy, from a rating of BB+ to BB, saying it would need a government bailout to pay back its debts.

ENDS

(News report from Issue No. 279, published on May 6 2016)

Azerbaijan lifts loan ban

MAY 5 2016 (The Conway Bulletin) – Azerbaijan’s government lifted a month-long ban on foreign currency loans, official media reported. The country’s Financial Markets Supervisory Authority, which acts as a regulator, had forbidden banks from granting loans denominated in foreign currency on April 5 to try and strengthen the local manat currency.

ENDS

(News report from Issue No. 279, published on May 6 2016)

Non-performing loans in Azerbaijan rise

APRIL 29 2016 (The Conway Bulletin) – International ratings agency Moody’s said that the proportion of loans deemed non-performing in Azerbaijan had reached 20%, a sign of the country’s poor economic health.

Moody’s said that data clearly shows the growth of non-performing loans in Azerbaijan. At the end of 2014, the proportion of non-performing loans in Azerbaijan had been 4.5%. This rose to 9.1% by the end of the third quarter of 2015 and has doubled, again, in the past six months.

Non-performing loans are credits that banks have been unable to collect for over 90 days. Analysts deem this timeframe a problem because when a loan is not repaid within three months it is likely that it will not be repaid at all.

Moody’s downgraded Azerbaijan’s economy, giving it a negative outlook and predicting problems collecting outstanding loans.

“The manat devaluation triggered a flight out of local currency deposits, led to a rise in banks’ problem loans, and eroded capital buffers,” it said in a statement.

Azerbaijan’s economy is heavily dependent on oil and gas which has collapsed in value since August 2014. The Central Bank devalued the manat currency twice last year. It ended the year at half the value it had started 2015 at.

Moody’s said this has had a negative impact on both economic activity and the banking sector.

“Azerbaijan’s economic growth outlook remains weak,” Moody’s said. “Moody’s recently revised its 2016 growth forecast for Azerbaijan, expecting real GDP to shrink by 3.3%, compared to a previous forecast contraction of 0.7%, reflecting its expectation of a contraction in both the oil/gas and non-oil/gas GDP sectors.”

ENDS

(News report from Issue No. 279, published on May 6 2016)

Armenian debt grows

APRIL 29 2016 (The Conway Bulletin) – According to Armenia’s Statistics Committee, foreign debt increased by 1.5% at the end of March, reaching $4.4b. Total debt also grew by 1.5% to $5.2b. The Committee said debt/GDP ratio will measure 49.4% by the end of the year. Debt/GDP ratio is a common measure to assess the health of a country’s economy.

ENDS

(News report from Issue No. 279, published on May 6 2016)