Tag Archives: inflation

Editorial: Azerbaijani, Kazakh, Georgian civil unrests

MARCH 4 2016 (The Conway Bulletin) – The economic downturn that has hit Central Asia and the South Caucasus in the past two years has dented people’s purchasing power.

Most people earn salaries in their local currency but these have lost between 50% and 25% of their value in the past months.

This has triggered some social unrest, especially in the South Caucasus. In January, people in Azerbaijan took to the streets to protest against rising food prices and stagnating wages.

The same reasons were voiced by miners in Tkibuli, Georgia, who went on strike for two weeks asking for a 40% increase in salaries. Now reports have emerged from Yerevan where market stall owners briefly scuffled with police over rental prices.

In Central Asia, protests are less frequent and, generally, silenced quickly by the authorities. Last month, however, dozens of Kazakh women banging pots and blowing whistles protested in Almaty about mortgage repayments.

The crisis is starting to bite hard and the people are growing increasingly restless.

ENDS

(Editorial from Issue No. 270, published on March 4 2016)

Editorial: Kyrgyz, Kazakh inflation

MARCH 4 2016 (The Conway Bulletin) – Inflation is the next enemy for South Caucasus and Central Asian countries hit by the regional economic downturn.

A fall in commodity prices at the end of 2014 pushed down revenues in the extractive sectors and sent the Russian rouble into a downward spiral. This then hit the value of local currencies, hurting people’s confidence in their Central Banks and their pockets.

Then came a fall in vital workers’ remittances from Russia, down by up to 45%.

Now, inflation appears to be on the rise, as Kyrgyzstan’s Central Bank chief Tolkunbek Abdygulov has warned.

In Kazakhstan, inflation is already at 15.1% year-on-year to the end of February 2016. It has been warning about a surge in prices and salaries since it effectively devalued its currency in Aug. 2015.

A couple of days after the devaluation, the Kazakh Central Bank said it was now making inflation-busting its top target. There is a lot of work to do.

ENDS

(Editorial from Issue No. 270, published on March 4 2016)

Inflation rises in Kazakhstan

MARCH 1 2016 (The Conway Bulletin) – Annualised inflation to the end of February measured 15.2%, its highest rate since 2008, the statistics agency said. The data is more evidence that the devaluation of the tenge last year by 50% has spurred overall inflation. The Central Bank had wanted inflation between 6 – 8%. It has now said its monetary policy is aimed at dampening inflation.

ENDS

(News report from Issue No. 270, published on March 4 2016)

Kazakh pensioners take jobs to survive economic slump

MARCH 4 2016, ALMATY (The Conway Bulletin) — Pensioners in Kazakhstan are giving up retirement and taking jobs to help them through a sharp economic downturn which has decimated the value of their tenge savings and their pension payments.

The trend is a major blow to the government ahead of parliamentary elections later this month. It had said that it will be able to look after all Kazakhs during the economic downturn.

But official data, suggested that for many pensioners in Kazakhstan, the downturn has been so heavy that they have had to return to work.

The size of the workforce aged over 65 in Kazakhstan, the usual retirement age, doubled in 2015, the ranking.kz website said quoting data from the state’s statistics centre.

In Almaty, a Conway Bulletin correspondent spoke to several elderly Kazakhs who had picked up a new job or had never quit work.

Nina Lozovaya, 81, was a chemistry and biology school teacher. She carried on working until she was 78. Now, though, her state teacher’s pension is so small that she was selling her clothes and other items on the street to earn money for medicine.

“The price for medications increased dramatically, and now I don’t have enough money to buy them,” she said. “Teachers’ pension is very small. I try to buy less medications now.” Her face crumpled with exasperation.

Further down the street an old woman was selling newspapers. She declined to be named but said: “I work because I need money, obviously.”

There is another side to the story behind Kazakhstan’s elderly workforce, though. People often carry on casual jobs after reaching retirement age to boost their income.

Sandugash, 73, worked in a small shop.

“After the death of my husband, I had many diseases and depression,” she said. “When I started working, each year I feel much better. And I can afford to go out sometimes because of the job.”

Life expectancy for men in Kazakhstan is 64 years and for women is 73 years. This means elderly women dominate the retirees’ workforce.

ENDS

(News report from Issue No. 270, published on March 4 2016)

Kazakhstan slips towards recession

FEB. 23 2016, ALMATY/DUSHANBE (The Conway Bulletin) — Kazakhstan verged on acknowledging that its economy may actually shrink this year and a Tajik Central Bank official said it was in talks with the IMF for an emergency loan, more signals that a sharp regional economic crisis was deepening further.

Normally bullish about its own GDP growth predictions, the reconfigured Kazakh government GDP growth estimate of 0.5% is an important sign of the severity of the economic downturn linked to low oil prices. Kazakhstan had earlier predicted GDP growth in 2016 at 2.1%.

“If the cost of a barrel of oil is $40, GDP growth will be 2.1%, but we’ve taken the conservative approach and have assumed that the price of oil will costs $30 per barrel and that GDP growth will hit 0.5%,” journalists quoted Yerbolat Dosayev, the economy minister as saying. Oil is currently around $35/barrel.

Importantly, this new GDP growth estimate is far closer to that of international economist who have said that Kazakhstan’s economy could shrink in 2016. The last time that Kazakhstan’s economy dipped into a recession was in 2008.

Low oil prices and a recession in Russia which has wiped out essential remittance and business investment flows have hit Central Asia hard. The scale and speed of the downturn appears to have wrong-footed leaders, including Kazakh president Nursultan Nazarbayev and his advisers.

They have slashed government budgets and also sold off chunks of state-owned companies, but they haven’t been able to prevent the tenge from losing 50% of its value and inflation rising. Officials are now worried about anti-government protests.

On the southern fringe of Central Asia, Tajikistan, the world’s most remittance-reliant economy, has also been reeling from the impact of the downturn. It has called in the IMF to try to organise an emergency loan.

Jamoliddin Nuraliev, deputy head of Tajikistan’s Central Bank, told the FT that talks with the IMF had begun.

“It’s crisis time,” he said.

Tajikistan has depleted its currency reserves in its Central Bank trying to defend the value of it somoni currency. At the same time, data has shown that the flow of remittances from Russia have dropped by around half.

ENDS

(News report from Issue No. 269, published on Feb. 26 2016)

Electricity price to rise in Armenia

FEB. 25 2016 (The Conway Bulletin) – Armenia’s Public Services Regulatory Commission (PSRC) approved a 1.5b dram ($3m) investment in its Soviet-era nuclear power plant Metsamor. Also at the press conference, the PSRC chairman, Shiraz Kirakosyan, said the controversial issue of raising electricity prices would be revisited in April. Last year proposed electricity price rises triggered street protests.

ENDS

(News report from Issue No. 269, published on Feb. 26 2016)

Armenia cuts rates

FEB. 16 2016 (The Conway Bulletin) – Armenia’s Central Bank cut its key interest rate by a quarter of a percentage point to 8.5% on Tuesday, its lowest level in a year, to try and maintain inflation. The Central Bank has previously said that, overall, prices for the 12- months to the end of January had fallen by 0.4%, despite a month-on- month rise of 2.2% in January compared to December.

ENDS

(News report from Issue No. 268, published on Feb. 19 2016)

Inflation pushes up in Armenia

FEB. 8 2016 (The Conway Bulletin) – Armenia’s consumer price index rose by 2.2% in January compared to December, the national statistics committee said. The statistics committee said a 5% increase in food prices last month pushed up overall inflation. This is the highest month-to-month inflation increase in Armenia in the past year.

ENDS

(News report from Issue No. 267, published on Feb. 12 2016)

Inflation jumps in Azerbaijan

FEB. 10 2016 (The Conway Bulletin) – Prices in Azerbaijan jumped by 5.8% in January compared to December, according to the national statistics committee. The statistics committee said food prices rose 8.7% last month. In December the Central Bank allowed the manat currency to float free against the US dollar. This triggered a 35% devaluation in its value, putting prices under enormous pressure to rise.

ENDS

(News report from Issue No. 267, published on Feb. 12 2016)

Inflation increases in Georgia

FEB. 3 2016 (The Conway Bulletin) – Annualised inflation in Georgia rose to 5.6% at the end of January, the state’s statistics agency said, an increase from 4.9% in December. Inflation increased steadily in Georgia last year hitting 6.3% in November, fuelled by a drop in the value of the Lari currency, until it dropped off slightly. By comparison, in January 2015, annualised inflation had been 1.4%.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)