JAN. 14 2016 (The Conway Bulletin) – Kyrgyzstan’s economy grew at 3.5% in 2015 compared to 4% in 2014, the state statistics committee said. The statistics committee said that the main reason for the slowdown was an 8% drop in production at the Kumtor mine. Production slowed at Kumtor, which is owned by Toronto-listed Centerra Gold, when it enlarged the mine.
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(News report from Issue No. 263, published on Jan. 15 2016)
JAN. 7 2016 (The Conway Bulletin) – The World Bank cut its economic outlook for Kazakhstan in 2016 to 1.1% because of sustained low oil prices. It had earlier predicted growth of 1.9% in 2016, up from 0.9% in 2015. Kazakhstan has been hard hit by the sudden and sustained fall in the price of oil.
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(News report from Issue No. 262, published on Jan. 8 2016)
DEC. 15 2015 (The Conway Bulletin) – Azerbaijan’s Central Bank released data that showed a massive drop in its current account surplus for January-September 2015 because of sustained low oil prices.
For the first three quarters of the year, the trade balance totalled $240.5m, down from $9.1b in the same period last year, showing the impact of low oil prices and currency depreciation.
Azerbaijan has run a current account surplus since 2005.
For the Jan.-Sept. period, the Central Bank used an average price of oil of $51/barrel, while last year the price level was set at $102/barrel. The Azerbaijani Central Bank devalued its currency by a third in February.
In particular, the balance of trade in the oil and gas sector was $5.4b, down from $15.1b compared to last year. This is important because oil and gas is a major earner for Azerbaijan.
Still, it could be worse. Kazakhstan, Azerbaijan’s oil exporting neighbour across the Caspian Sea, recorded a deficit in the first three quarters of the year having posted a surplus in 2014.
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(News report from Issue No. 261, published on Dec. 20 2015)
DEC. 3 2015 (The Conway Bulletin) – The World Bank predicted that Kazakhstan’s economy would grow at its slowest rate since the mid-1990s, four days after President Nursultan Nazarbayev tried to shrug off the worsening economic outlook by telling listeners during a state-of-the- nation speech that they have never had it so good.
Throughout the year economists at the World Bank have been down- grading growth rates in Kazakhstan but a new lower GDP growth estimate of 0.9% this year, smaller than growth rates in the 2008/9 global financial crisis, still came as a shock.
And worse was to follow. The World Bank said GDP growth would measure only 1.1% in 2016.
“The uncertain external outlook will dampen private investment, while the pass-through effect of the tenge depreciation will reduce house- hold consumption and public consumption will remain modest due to the ongoing fiscal adjustment.” the World Bank said in its report.
From 2017, the economic outlook would improve mainly thanks to the giant Kashagan oil field coming on- stream. But the warning signs are there.
If the World Bank’s outlook comes through, it’ll be the first time for over 20 years that growth in Kazakhstan has been so low for two consecutive years.
Three days earlier Mr Nazarbayev had tried to rally his countrymen in a televised state-of-the-nation speech that was filled with talk about toughing out the economic malaise.
He blamed factors outside his control for the economic downturn and then told his audience that they have never lived in such a prosperous period.
“Never before have our people lived as well as they do now,” he said. “We have achieved a lot.”
And Mr Nazarbayev needs to put a brave face on things. Inflation has jumped to around 10% and the value of the tenge currency has halved in the past 18 months.
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(News report from Issue No. 259, published on Dec. 4 2015)
NOV. 26 2015 (The Conway Bulletin) – Tajikistan debt-to-GDP ratio will rise to 30% by the end of the year from 22.5% at the start of the year, media quoted various analysts as saying. Tajikistan’s growing debt ratio highlights the impact of the economic downturn on the economies of Central Asia and the South Caucasus. Tajikistan’s remittances from Russia have fallen 40% this year.
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(News report from Issue No. 258, published on Nov. 27 2015)
NOV. 23 2015 (The Conway Bulletin) – Kazakhstan’s parliament approved a budget designed to both limit spending during a period of low oil prices and target a national deficit that has crept up to a 10-year-high.
Perhaps with this in mind, the sovereign wealth fund Samruk-Ka- zyna announced plans to cap pay and close 33 of its 36 overseas offices and the Central Bank said that it would slow work on building a state-of-the- art data centre in Astana.
The government’s budget for 2016-18 acknowledged that economic growth had stalled and would measure only 1.2% this year, its lowest rate since 2009 — the height of the Global Financial Crisis.
It also specifically wanted to target a deficit which has grown to around 3% of GDP, its highest in the past decade.
Presenting the government’s budget, PM Karim Massimov acknowledged the severity of the economic challenge.
“On December 8, the government will adopt an anti-crisis programme for the next three years. We will unite all previous economic programmes under a new umbrella,” Mr Massimov told the Senate.
President Nursultan Nazarbayev later confirmed he will address the nation on Nov. 30 on plans to tackle to the growing economic malaise.
The new budget forecasts oil prices to remain within the $40- 50/barrel range and the tenge to remain stable at around 300/$1.
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(News report from Issue No. 258, published on Nov. 27 2015)
NOV. 6 2015 (The Conway Bulletin) — Kyrgyzstan has the highest debt-to- GDP ratio of any country in Central Asia and the South Caucasus, spurring a heated debate this week in the Kyrgyz parliament.
MPs questioned Temir Sariyev, seeking endorsement to continue his job as PM, on the sustainability of Kyrgyzstan’s debt which reached $3.4b in November.
Oil and gas importers, like Kyrgyzstan, typically show higher level of debt compared to energy- rich countries. Kyrgyzstan has a debt-to-GDP ratio of 53% debt ratio.
And this is set to continue in the increasingly tight economic climate which has dragged down essential remittances from Russia to Kyrgyzstan. The IMF said Kyrgyzstan’s debt-to-GDP ratio would reach 60% in 2015 and 62% in 2016.
Kyrgyz deputies said they were worried the country might default under these circumstances.
Mr Sariyev dismissed the rumours of default indicating that other countries have far worse debt levels and do not default. According to Mr Sariyev debt is important for the Kyrgyz economy, financing important infrastructure projects.
Still, Kyrgyzstan shows the worst fiscal balance and debt ratios in the region. Armenia, also an energy importer, has a 41% debt ratio, and Georgia 38%, according to the IMF. Tajikistan posted a debt-GDP level of just 28% in 2014, but it will grow to almost 33% in 2015, a direct consequence of the regional economic downturn.
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(News report from Issue No. 255, published on Nov. 6 2015)
OCT. 20 2015 (The Conway Bulletin) – Azerbaijan’s government said its economy would grow by only 1.8% next year compared to 4.4% this year because of low oil prices and a drop in production. Parliament also approved a national budget for 2016 of 14.6b manat ($13.9b), down by 10.4% from last year.
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(News report from Issue No. 253, published on Oct. 23 2015)
OCT. 7 2015 (The Conway Bulletin) — Analysts in Kazakhstan have revised their inflation expectations down to 7.1% this year after official data showed that the consumer price index grew by only 1% in September.
Halyk Finance researchers said the numbers are much more encouraging than what they forecasted. This should keep inflation within the Central Bank target of 6-8%. Central Bank chairman Kairat Kelimbetov said he doesn’t rule out the possibility of a further increase in interest rates, after a new rate was set at the end of last week.
The Eurasian Development Bank (EDB) said in a report that Kyrgyzstan’s economy is poised to grow by 1.8% this year. This came after PM Temir Sariyev disclosed more optimistic numbers, pointing out that in Jan.- Sept. 2015, the country’s economy grew by 6%. The EDB said it expects a marginal slowdown in economic activity in Q4 2015.
The IMF has dramatically increased its forecast for Azerbaijan’s growth in 2015, from a meagre 0.6% in April to 4% in its latest report.
The international lender also revised inflation expectations downwards from 7.9% to 5% for 2015, more good news.
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(News report from Issue No. 251, published on Oct. 9 2015)
SEPT. 30 2015 (The Conway Bulletin) – Preliminary GDP data for August showed that growth in Georgia measured 2.3% compared to the same month in 2014, the Georgia statistics agency said. This was the slowest year-on-year GDP growth since May.
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(News report from Issue No. 250, published on Oct. 2 2015)