Tag Archives: GDP

Azerbaijan slips towards recession

MARCH 16 2015 (The Bulletin) – Azerbaijan’s GDP in January was nearly 17% lower than for the same month in 2015, the Central Bank said in its monthly report on the state of the economy.

In January, Azerbaijan generated receipts worth 3.63b manat ($3.46b) compared to 4.36b manat in January 2014. This means that Azerbaijan is slipping towards a recession.

The Central Bank slashed the value of the manat by 33% last month and most media in Azerbaijan, which is generally pliant and pro-government, spun the drop as a rise in real GDP because of the devaluation.

Many economists disagreed, though. Samir Aliyev, an economist at the Center for Assistance to Economic Initiatives in Baku, said this heavy drop in GDP is more evidence that the combined impact of the drop in global oil prices and also the downturn in Russia’s economy have hit Central Asia and the South Caucasus hard.

“We witnessed such a big drop only in 2008 and 2009 during the global economic crisis, when oil prices slipped down,” he said. “However, to call it a recession we should have numbers for at least three months.”

The trickle-down effect of the collapse in oil prices from the summer of 2014 — prices fell by around 50% — has only just begun to seriously dent Azerbaijan’s economy. January was the first month that GDP dropped.

Data from the Central Bank also showed that Azerbaijan’s non-oil economy — which international economists said needs to grow — increased by 5%.
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(News report from Issue No. 223, published on March 18 2015)

FDI in Georgia jumped 39% in 2014

MARCH 15 2015 (The Bulletin) – Preliminary data from Georgia’s statistics agency, Geostat, showed that foreign direct investment (FDI) jumped by 39% to 1.3b last year.

This is the highest level of FDI since 2008 when Georgia experienced an economic boom before a short war against Russia curtailed investor confidence in the country.

Geostat wasn’t able to give specific reasons for the sharp increase in FDI in 2014. FDI is vitally important in Georgia and the statistics showed how Georgia’s economic conditions had improved this year.

The data, though, doesn’t reflect the worsening economic conditions over the past months.

Economic turmoil in Russia and a drop in the price of oil have hit the region, knocking growth rates and denting currencies. This has trickled through to Georgia. FDI levels are expected to fall again this year.
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(News report from Issue No. 223, published on March 18 2015)

IMF says that Georgia is well placed to weather financial storm

MARCH 5 2015 (The Bulletin) – Severe external shocks have hit Georgia’s economy causing it to falter and for growth to slow to a virtual standstill, the IMF said at the end of a mission to Tbilisi.

But the IMF said that because Georgia has been able to keep its government budget deficit under control it is better placed than other countries in the region to weather the economic storm triggered by a decline in oil prices and the drop in Russia’s economic health.

“We look forward to plans to accelerate reforms to make Georgia a more attractive place for doing business and for investing, for creating jobs, and for boosting growth in the future,” the IMF said in a statement.

“These should include easing recent restrictions on foreign businesses, seeking out new private investment, boosting saving through pension and capital market reforms and raising education standards.”

It also gave a much needed boost to Georgia’s Central Bank chief Giorgi Kadagidze who has been criticised for not doing enough to divert the country from a decline in the value of its lari currency.

“We need to protect independence of the central bank; they are doing a good job,” media quoted Mark Griffiths, who led the IMF mission as saying.
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(News report from Issue No. 222, published on March 11 2015)

Kyrgyzstan-bound FDI dries up

MARCH 6 2015 (The Bulletin) – According to a recent publication by the Kazakhstan/Russia-funded Eurasian Development Bank (EDB), foreign investment in Kyrgyzstan in 2014 measured only $187m, down by 70% from 2013.

In 2013, the Central Asian country received over $623m in foreign direct investment (FDI), mainly from China, Russia, Britain, and Canada.

The EBD said the macroeconomic downturn which began in early 2014 was the main reason for the reduction of foreign activity. The recurring threat of nationalising the gold mine at Kumtor, together with monetary issues and galloping inflation, are also all factors.

The Kyrgyz government has tried to remedy the situation by increasing interest rates above 10% and protecting the national currency, the som, from the financial strains common throughout the region. Although it has performed better than the rouble, the som has lost over 20% against the dollar in the past six months.

FDI is a lifeline for countries like Kyrgyzstan, which rely on remittances from migrant workers abroad and capital injections from foreign investors.
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(News report from Issue No. 222, published on March 11 2015)

Armenian economic growth falls

FEB. 27 2015 (The Conway Bulletin) – Armenia’s economy grew by 3.4% in 2014, lower than the expected 5.2%, the country’s statistics office said quoting preliminary data (Feb. 27). The economies of Central Asia and the South Caucasus suffered from a general downturn in the second half of last year due to falling oil prices and problems in Russia’s economy.
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(News report from Issue No. 221, published on March 4 2015)

Kumtor gold production falls

FEB. 19 2015 (The Conway Bulletin) — In its annual report, the Toronto-based Centerra Gold said that its Kumtor mine in eastern Kyrgyzstan produced 10% less gold in 2014 than it did in 2013.

Kumtor is not only important to Centerra Gold, which also has other assets, but is also vital to the economic health of Kyrgyzstan. It is the country’s largest single asset and contributes around 10% of its total GDP.

Already reeling from the fallout from Russia’s sanction-hit economic slowdown, the news from Centerra Gold that, although expected, gold production at Kumtor had fallen will be a another big blow to Kyrgyzstan.

Centerra Gold said gold production in 2014 was around 620,000 ounces, down from 690,000 ounces.

Kumtor has been a headache over the past few years. Kyrgyzstan wants to assume more control over the gold mine, while Centerra Gold has been fighting to retain its share.

Strikes and protests caused part of the drop in production at Kumtor.

Centerra Gold CEO, Ian Atkinson said of negotiations with the Kyrgyz government over Kumtor ownership: “We are in the process of negotiating the definitive agreements to implement the restructuring as described in the Heads of Agreement signed on January 18, 2014 and are continuing discussions with the Kyrgyz Government in this regard.”

Kyrgyzstan wants to swap its 32.7% stake in Centerra Gold for a 50:50 joint venture in Kumtor directly.
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Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 220, published on Feb. 25 2015)

Tajik migrants head home

FEB. 22 2015 (The Conway Bulletin) — The falling rouble has persuaded up to half of St Petersburg’s Central Asian casual work force to return home, the AFP news agency reported.

St Petersburg’s deputy governor, Igor Albin, reportedly said that 50% of the snow sweepers, normally from Central Asia, had left the city.

AFP’s correspondent in St Petersburg directly quoted the head of a snow sweeping company who gave similar insight, although with a lower percentage heading home.

“Almost 30% of the workers who left to spend New Year’s as usual with their families in Uzbekistan or Tajikistan have not come back,” he said.

Uzbekistan, Kyrgyzstan and Tajikistan are most vulnerable to this trend. Tajikistan holds the dubious position as the country that is most reliant on remittances. These make up about 50% of its total GDP.

The Tajik Central Bank has tried to prop up its currency against the falling Russian rouble although it has warned that inflation is creeping up.

In Dushanbe, an immigration official told AFP that only half the number of Tajiks were leaving to take jobs abroad this year, compared to the same period in 2013.
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Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 220, published on Feb. 25 2015)

Georgia growth rate is halved

FEB. 23 2015 (The Conway Bulletin) — In an interview with Reuters news agency, Georgia’s economy minister Georgy Kvirikasvili said he may halve the country’s projected economic growth to 2.5% this year. Mr Kvirikasvili said the side-effects of Ukraine’s civil war and the sanctions on Russia had hurt Georgia’s economy.
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Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 220, published on Feb. 25 2015)

Armenia CBank reduces growth estimate

FEB. 23 2015 (The Conway Bulletin) — Armenia’s Central Bank has said that economic growth this year could virtually stagnate at a mere 0.4%, media reported. This figure is at the lower end of its updated estimate which blamed a poor Russian economy for the general slowdown in Armenia’s own economic prospects.
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Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 220, published on Feb. 25 2015)

Georgia cuts growth rate

>>Russian woes continue to weigh on South Caucasus region>>

FEB. 6 2015 (The Conway Bulletin) — Georgia became the latest country in the South Caucasus/Central Asia region to downgrade its economic forecast for this year.

Finance minister Nodar Khaduri said growth would measure 4% in 2015, down from an earlier prediction of 5%.
Like its neighbours, the slowdown in Russia’s economy is also impacting on Georgia.

“Economic growth in Armenia and Moldova this year was zero percent. A drop is expected in economic growth in Ukraine and Russia due to well-known reasons,” media quoted him as saying.

Georgia’s economy is slightly better sheltered from the economic storm swirling around Russia. The depressed state of the Russian economy has hit Armenia hard and the fall in the price of oil has dented Azerbaijan’s economy.

Georgia, though, is not reliant on either the Russian economy nor on oil prices. That said, both still filter through and impact Georgia.

The Georgian Central Bank has already said it will likely raise interest rates later this month to try and combat the falling value of its lari currency.

“Considering the challenges in the economy today and analysing the numbers and data it is necessary that we start to revise the 5% growth prognosis and plan macroeconomic and fiscal indicators from the beginning so they adequately reflect the economic policy, and respond to these challenges,”” Mr Khaduri said.
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(News report from Issue No. 218, published on Feb. 11 2015)