JAN. 19 2015 (The Conway Bulletin) — Price changes in Armenia have become increasingly erratic as the country tries to deal with the fallout of the Russian economic slowdown. In August, media quoted the national statistics agency as saying that deflation in Armenia measured 5.2% but for the rest of the year inflation averaged 6.5%.
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(News report from Issue No. 215, published on Jan. 21 2015)
JAN. 9 2015 (The Conway Bulletin) — Food prices in Kazakhstan have increased by nearly 20%, the news website zakon.kz reported. Its unofficial survey of prices said they had risen far more than the official Statistics Committee data showed. Wheat, zakon.kz reported, had increased the most with a 25% rise in 2014.
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(News report from Issue No. 214, published on Jan. 14 2015)
>>People in Baku worry that fuel price rises may also accelerate inflation>>
JAN. 12 2015 (The Conway Bulletin) — Oil prices may be falling on the world market but in Azerbaijan the cost of filling your car with either petrol or diesel has actually increased.
The government announced that it was putting the price of fuel up by 0.02 manat to 0.7 manat ($0.9) for a litre of petrol and 0.62 manat for diesel.
This sounds like a marginal increase only but, given the 50% drop in oil prices, actually represents a sharp rise.
Independent observers say that this is another attempt to fill the state budget, so dependent on oil revenue, with cash.
The government, though, has said the price increase was due to the inclusion of a road tax on oil products produced in Azerbaijan for domestic consumption, as well as imported from abroad.
In a suburb of Baku, 52-year-old taxi driver Ahmed Huseynov was waiting for customers at a taxi rank. It was a damp, dreary afternoon. The roads and rooftops were sodden and slippery after the first snows of the year.
“Every day we hear on the news that oil prices are decreasing which logically should have led to a decrease in fuel prices too,” he said. “I don’t understand the government’s decision.”
Azad Gayibov, 38, a school teacher and father of two, said the fuel price increases will mean careful budget planning for his family. “It does not mean an increase in fuel prices only, but also a deterioration in the entire economy.”
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(News report from Issue No. 214, published on Jan. 14 2015)
JAN. 8 2016 (The Conway Bulletin) — Currency woes in 2015 quickly translated into inflation across the South Caucasus and Central Asia.
Kazakhstan can be singled out as the worst performer in this department as inflation grew by a staggering 13.6% in 2015.
It was only in November that the minister of economy Yerbolat Dossayev said inflation wouldn’t surpass 10% in 2015. He was clearly wrong.
Interestingly, food prices grew significantly in Kazakhstan (+10.9%), while in Kyrgyzstan it was precisely food items that kept inflation from going too high.
Kyrgyzstan’s 11-month inflation in 2015 was 6.8% overall, but food prices decreased by 4.8% (Jan. 5).
Geostat, the Georgian statistics service, said annual inflation amounted to 4.9% in December, a 0.6% deflation compared to the previous month driven by lower transport and fuel prices, another impact of low oil prices.
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(News report from Issue No. 262, published on Jan. 8 2016)
>>Central Bank has already increased interest rates this year>>
DEC. 29 2014, (The Conway Bulletin) — Inflation in Tajikistan jumped to over 7% in 2014, the Central Bank said, around double the rate in 2013.
The final figures for the year are not yet out but the Central Bank said annualised inflation up to the end of November had been 6.8% and that this would creep up again when December’s data was analysed.
Tajikistan raised its interest rates in October to 6.9%, its highest level since 2012, up from 4.8% earlier in the year, to try and steady its economy against rising inflation.
With remittances from Russia, which contribute to around 50% of GDP, dropping because of a slowdown in the Russian economy, Tajikistan is facing up to an increasingly tough time.
News that inflation is rising just adds to the headache.
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(News report from Issue No. 213, published on Jan. 7 2015)
DEC. 8 2014 (The Conway Bulletin) – Bread prices have begun to rise for the first time since March, Armenian media reported. Armenia’s economy has been hit by the downturn in Russia’s economy. Commentators said that the rise in bread prices was directly attributable to an increase in the price of flour.
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(News report from Issue No. 212, published on Dec. 10 2014)
DEC. 2 2014 (The Conway Bulletin) – Inflation in Kazakhstan is beginning to edge up to the psychologically important double digit zone. The Kazakh statistics committee said prices rose by 0.7% in November after a 0.5% increase in October.
This is a precarious position for the Kazakh Central Bank. Annualised inflation already measures 7.6%. It won’t be long, if the current trend continues, until it hits 10%.
The problems are two two-fold and well-known — Russia and the drop in the price of oil.
These two issues have combined to produce something of an economic storm for Kazakhstan. And its options are limited. The Central Bank devalued — without warning — its tenge currency by 20% in February. For its currency to retain any credibility, it has had to pledge to protect it from further devaluation.
There is already a lot of economic uncertainty in Kazakhstan. Rising inflation is adding to that.
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(News report from Issue No. 211, published on Dec. 3 2014)
NOV. 28 2014 (The Conway Bulletin) – The depreciation of the Russian rouble has hit Kazakhstan’s energy sector, media reported.
Kazakh media said Samruk-Energo, the state-owned energy company, had cancelled rouble-denominated contracts with Russian clients.
“We have suspended power supplies over the lingering Russia’s currency devaluation. Supplies are no longer economically viable for Kazakhstan-based power plants. Loss of the markets is an important issue,” media quoted Almasadam Satkaliyev, head of Samruk-Energo, as saying.
This is important as it shows how Kazakh industry is beginning to lose out from a depreciating rouble. It’s an issue that could threaten to upset otherwise close relations between the two neighbours.
Kazakhstan has signed up to the Russia-led Eurasian Economic Union and has a host of other friendly treaties in place.
The problem is that the Kazakh Central Bank has pledged not to devalue its currency after knocking 20% off its value earlier this year. This means that Kazakhstan will have to look elsewhere to sell its power or accept a vastly reduced price.
Mr Satkaliyev also said that Kazakhstan was looking to replace coal supply contracts with Russian clients.
“Russia’s economy is not ready to import Kazakhstan’s coals at higher prices. Russia has adopted a program to replace Kazakhstan’s coal,” he said.
“A second factor is the continuing devaluation of the Russian rouble. All the contracts rely on the Russian rouble; therefore for the Kazakh side it is of great importance to ensure economic viability of supplies.”
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(News report from Issue No. 211, published on Dec. 3 2014)
DEC. 1 2014 (The Conway Bulletin) – The devaluation of the manat, the Kyrgyz currency, and slowing economic growth have combined to push inflation in Kyrgyzstan up to 8.5%, the World Bank said in a report quoted widely by local media. The World Bank also said that it expected inflation to keep rising towards 10%. This could mean social trouble.
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(News report from Issue No. 211, published on Dec. 3 2014)
NOV. 26 2014 (The Conway Bulletin) – Prices of basic food products are rising in Dushanbe, local media reported, because of a fall in the value of the Tajik somoni. Tajik news agency Asia-Plus reported that a bag of flour now sold at 175 somoni, up from 165 somoni a week earlier, and that vegetable oil cost 44 somoni up from 40 somoni.
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(News report from Issue No. 211, published on Dec. 3 2014)