APRIL 21 2016 (The Conway Bulletin) – Ratings agency Fitch said Kazakhstan’s GDP will shrink by 1% in 2016 and the value of assets owned by Samruk-Kazyna, the country’s sovereign wealth fund, will decline by $3b, or 5%. Fitch’s accounting is more pessimistic than previous government calculations, which forecast marginal GDP growth for 2016.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 277, published on April 22 2016)
APRIL 19 2016 (The Conway Bulletin) – A regional economic downturn has dented Armenia’s imports in 2015, data from the state Statistics Committee showed. Car imports shrank by 38% to 27,300 last year, compared to 2014. Oil imports shrank by 8%. A region-wide currency crisis has affected purchasing power in the South Caucasus and Armenia’s trade numbers reflect this.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 277, published on April 22 2016)
APRIL 19 2016 (The Conway Bulletin) – Exports from Kazakhstan fell by 34.6% in Jan.-Feb. 2016, compared to the same period last year, the Statistics Committee said. In US dollar terms, Kazakhstan’s trade turnover in the first two months of the year was $8.8b. Imports also fell by 34%. Notably, import/export volumes with Kyrgyzstan, which joined the Eurasian Economic Union in August 2015, fell by two thirds.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 277, published on April 22 2016)
APRIL 21 2016 (The Conway Bulletin) – Samruk Energo, a subsidiary of Kazakhstan’s sovereign wealth fund Samruk-Kazyna, said it paid 11b tenge ($33m) to double its stake in the Balkhash Thermal Power Plant project to 50% minus one share. It did not say who it bought the stake from although last year Korea-based Samsung Engineering said it wanted to quit the project. The new Balkhash power plant will cost around $4.2b to build, according to Samruk Energo’s latest estimates.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 277, published on April 22 2016)
APRIL 15 2016 (The Conway Bulletin) – Kyrgyzstan’s industrial production fell by 25.7% to 39.5b som, mainly due to a slump in the mining sector, the Statistics Committee said in a report. The figures reflect the 4.9% GDP decline the Committee posted last week. Without accounting for Kumtor, Kyrgyzstan’s largest gold project, industrial output would have declined by 1%.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 277, published on April 22 2016)
APRIL 15 2016 (The Conway Bulletin) – Azerbaijan’s GDP shrank by 3.5% in the first quarter of the year to 12b manat ($7.95b), the Statistics Committee said. A fall in industrial production and flat oil production have worsened Azerbaijan’s overall economic performance, according to the government.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 277, published on April 22 2016)
APRIL 15 2016 (The Conway Bulletin) – Azerbaijan is phasing out a programme that funded overseas study for undergraduates in order to save money during an increasing vicious economic downturn.
Mikhail Jabbarov, Azerbaijan’s minister of education, said funding for bachelor level programmes has dried up.
“The ministry is developing a new format of the program, which envisages education at foreign higher educational institutions only for PhD and Master’s Degrees,” Mr Jabbarov told media.
The government’s stated objective is to attract more foreign professors to Azerbaijan to allow undergraduates to receive high-level tuition without having to study abroad.
What the government cannot openly say is that the programme has become unsustainable because of a sharp drop in oil prices that has dragged down its economy.
The ministry of education’s overseas undergraduate programme is one of two channels that Azerbaijani youth can use to access scholarships to study abroad.
SOFAZ, the country’s oil fund, had also established an eight-year programme in 2007 to fund education abroad. But that programme is now being wound up and is unlikely to be extended.
In the first quarter of 2016, SOFAZ said it spent 5m manat ($3.3m) paying fees for Azerbaijanis studying abroad.
Analysts have said that if both programmes were cut, Azerbaijan would, effectively, be isolating itself from the West.
The government has already cut several domestic social projects, including updating broadband internet across the country and investments in care homes, roads and railways, to cut costs.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 277, published on April 22 2016)
ALMATY, APRIL 20 2016, (The Conway Bulletin) — Kazakhstan’s telecoms sector continues to limp through an economic downturn that has knocked consumer confidence and dented sales.
Kcell, the largest mobile operator, said in quarterly results that its year- on-year revenues fell by 17.7% in Q1 2016 to 35.5b tenge ($107m), its lowest since an IPO in 2012.
Prices have fallen in the ultra competitive Kazakh telecoms sector with Sweden’s Tele2 and Altel undercutting the tariffs of the two dominant companies — Kcell, majority owned by Telia Company, and Russia’s Vimpelcom which trades under the Beeline brand. Telia Company is the rebranded name for TeliaSonera.
Tele2 and Altel completed their long touted merger in February.
A combination of low oil prices and a recession in Russia has triggered an economic downturn in Kazakhstan and Central Asia. Consumer spending is down and companies are laying off workers.
Kcell CEO Arti Ots highlighted the impact of the poor economic conditions in a statement alongside the quarterly results.
“As expected the first quarter of the current year has been challenging,” he said.
“We are not seeing any significant signs of a market recovery, but there have been some indications that the intense downward pressure on pricing we have experienced in recent years is starting to ease.”
In Q1, Kcell said it lost 9% of its subscribers. More importantly, perhaps, Kcell said that the average revenue per user fell by 7% despite a strong uptake in data traffic.
In her own quarterly results, Tele2 CEO Allison Kirkby confirmed that the company had grabbed market share and that revenues had grown but also that Kazakhstan’s turbulent economy had dented profits.
“EBITDA [a profit measure] is impacted by both business expansion and the significant devaluation of the Kazakh tenge,” she said (April 21).
The tenge lost 50% of its value against the US dollar last year.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 277, published on April 22 2016)
APRIL 18 2016 (The Conway Bulletin) – The cost of running water to Kazakh households was an average 28% higher in March 2016 compared to a year earlier, data from the Statistics Committee showed. The data underlined just how sharp inflation has been in Kazakhstan since a devaluation of the tenge last year. In some areas the price was even steeper. In Aktobe, the price of water has increased by 76%.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 277, published on April 22 2016)
APRIL 15 2016, ALMATY (The Conway Bulletin) – A sharp economic downturn and a 40% overvaluation of the tenge last year combined to destroy Kazakhstan’s car making industry, new data showed.
The Kazakhstan Automobile Business Association (AKAB), an industry lobby group, said that in the first three months of 2016 Kazakhstan produced 428 cars, a fraction of the 12,450 cars produced a year earlier.
The data highlights the plight of the car making industry in Kazakhstan, which had once been held up as an example of how the country’s industrial base can modernise.
There are three car factories in Kazakhstan – AziaAvto, Saryarka AvtoProm and Avtomashholding. Between them they make cars for Lada, Kia, Chevrolet, Skoda, Hyundai, SsangYong and Peugeot.
None of the three car factories replied to Conway Bulletin requests for comment.
A general economic downturn was exacerbated last year by a disparity between the price of the tenge and the rouble until mid-August, when the Kazakh Central Bank finally allowed its currency to devalue. Between January and the devaluation, the tenge, propped up by the Central Bank, was around 40% over-valued against the rouble.
This had two effects. Kazakhs headed north to buy their new cars from Russian dealerships, undermining domestic sales, and exports to Russia collapsed.
MPs also said a $3,000 registration fee introduced at the beginning of this year on cars built in 2015 has deterred people from buying cars. It was introduced to re-coup lost revenue from Russian cars sold to Kazakhs in 2015.
Car showrooms around Almaty lie empty. There are simply no customers. Markhaba and her family have been considering buying a new car. She explained why they still haven’t one.
“The price of new cars in tenge increased by 20% to 30%, and we are still considering whether we really need to buy one or not.” she said.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 277, published on April 22 2016)