MARCH 2 2017 (The Conway Bulletin) — Strong oil prices may boost GDP growth in Kazakhstan to 2.8% this year, economy minister Timur Suleimenov told Reuters in an interview. The previous government GDP growth estimate for 2017 had been 2.5%. Last month, Kazakhstan increased its expected oil price this year for its government budget to $50/barrel up from $35/barrel.
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(News report from Issue No. 319, published on March 3 2017)
MARCH 3 2017 (The Conway Bulletin) — Deflation in Armenia continued to slow in January, just as the Central Bank said it would earlier in the year. The National Statistics Service said that prices dropped by an average of 0.2% in February compared to the same period in 2016. In January, year-on-year deflation had measured -0.6% and in February 2016 it had measured -1.7%.
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(News report from Issue No. 319, published on March 3 2017)
MARCH 3 2017 (The Conway Bulletin) — Prices in Georgia were 5.5% higher in February 2017 compared to the same month in 2016, the State Statistics Service said, confirming Central Bank predictions of inflation pressure when it raised interest rates last month (March 2). It had set an inflation target of 4% in 2017.
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(News report from Issue No. 319, published on March 3 2017)
MARCH 1 2017 (The Conway Bulletin) — At the end of a two-week mission to Georgia, the IMF agreed a three year $285m funding programme aimed at encouraging economic reform and Western investors. The deal replaces an earlier one that had expired. It should give the Georgian govern- ment an extra level of support as it pulls out of an economic malaise.
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(News report from Issue No. 319, published on March 3 2017)
TBILISI, FEB. 18 2017 (The Conway Bulletin) — Georgia’s National Food Agency said it had suspended operational licences for 11 meat businesses because they failed hygiene requirements set out under new rules imposed by the EU.
The suspensions show the complexities of trying to bring hygiene standards in Georgia up to EU requirements so that businesses can take advantage of a new deal brought in last year which allows Georgian companies to export directly to Europe.
The 11 business included three slaughterhouses, four meat whole- sale facilities, three catering facilities, and one farmers’ market. On top of that, 34 business operators were fined due to minor infringements.
In an interview with The Conway Bulletin, Kakha Sokhadze, deputy head food safety inspector at the National Food Agency, said many local businesses still need to adapt to the new regulations.
“Because of the obligations we have with the EU, we are increasing the number of inspections and the more you cover, the more you find cases of non-compliance. Business operators should understand that there are new rules and new requirements,” he said.
Last year the EU and Georgia signed an Association Agreement that paved the way for various producers to export goods to the EU. Georgian companies have already signed deals with European importers to send wool and honey.
And the deal with the EU is having a far-reaching impact in Georgia.
Even meat which is not being exported now has to comply with new rules aimed at boosting hygiene.
Various labelling requirements, for example, were brought in on Jan. 1.
To export to the EU, each food category needs to be certified, said Carlo Natale, deputy head of the EU’s delegation in Georgia.
“Each product is approved after several studies and measurements are made in the country of production,” he told the Conway Bulletin. “At the moment we are examining fish and its various types of process- ing. Then, we will examine dairy products. The last one will be beef and meat. They are the most difficult.”
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(News report from Issue No. 318, published on Feb.24 2017)
FEB. 23 2017 (The Conway Bulletin) — Textile production in Kyrgyzstan was 27% lower in January compared to the same period a year earlier, media reported quoting official statistics. This is important as it shows the impact of a downturn in the economy. Textile production, outside mining, is one of Kyrgyzstan’s main earners.
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(News report from Issue No. 318, published on Feb.24 2017)
DUSHANBE, FEB. 22 2017 (The Conway Bulletin) — Tajiks working in Russia sent $1.9b back to Tajikistan in 2016, representing around a third of the national GDP, Russian presidential aide Yuri Ushakov said quoting Central Bank statistics.
The data underlines the fall in the value of the remittances being sent back from Russia, where a drop in oil prices and Western sanctions imposed after Russian interference in eastern Ukraine, has hit the economy and pushed it into a recession.
“Over 870,000 Tajikistan citizens are working in Russia. The amount of their money transfers to the motherland was $1.9 bln in 2016, corresponding to one third of the republican GDP,” Tass news agency quoted Mr Ushakov as saying.
Remittances of $1.9b is around 15% lower than in 2015, which was itself nearly 50% lower than in 2014. The proportion of Tajikistan’s national economy that remittances makes up is also down sharply. Previously, remittances sent to Tajikistan from Russia accounted for around half of its GDP.
Tajikistan and Kyrgyzstan are often described as being the most remittance-dependent countries in the world.
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(News report from Issue No. 318, published on Feb.24 2017)
FEB. 24 2017 (The Conway Bulletin) — The Kazakh tenge added another 1% on to its value this week, bolstered by a rise in oil prices, and the Georgian lari added 2%, a rise that analysts attributed to a general improvement in global economic sentiment.
It was a different story, though, across the South Caucasus, where the Azerbaijani manat lost another 0.8% to fall to 1.7925/$1. This is frustrating for the Central Bank as the manat had looked good to break 1.7445/$1, the level it reached at the start of February – its strongest since November.
In any case, the manat has recovered since the end of January when it bottomed out at 1.95/$1.
But the Chairman of Board of Directors of Financial Markets Supervision Authority, Rufat Aslanli, told media that the manat couldn’t rely on oil prices to pull it out of its negative spiral. “Oil price has impact on sustainability of our economy, but not on the exchange rate of dollar,” he said.
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(News report from Issue No. 318, published on Feb.24 2017)
FEB. 20 2017 (The Conway Bulletin) — In an interview with Euronews, Kyrgyz president Almazbek Atambayev directly criticised his neighbour Kazakhstan for imposing what he described as an economic blockade in 2010. He was discussing why Kyrgyzstan joined the Kremlin-lead Eurasian Economic Union, a trade group that has grown unpopular in Kyrgyzstan. Kazakhstan responded to the accusation of an economic blockade by filing an official complaint. Relations between Kyrgyzstan and Kazakhstan have become fraught over trade rows.
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(News report from Issue No. 318, published on Feb.24 2017)
ALMATY, FEB. 20 2017 (The Conway Bulletin) — Kazakhstan’s Central Bank cut its key interest rate by one percentage point to 11%, its lowest level since it introduced its this key rate in September 2015, and delivered one of its most upbeat assessments of the economy for years.
Central Bank chief Daniyer Akishev said that improved global economic outlook, a rise in oil prices and a slowdown in inflation had allowed him to cut the rate. At the beginning of last year, Kazakhstan’s interest rate had measured 17%.
Both the rate cut and the renewed confidence in the economy will be a relief to investors and to ordinary Kazakhs who have had to deal with an avalanche of grim economic data since oil prices collapsed in mid-2014.
“We took into account the positive impact of external factors. Sustainable world oil prices above $50 per barrel, improving global eco- nomic prospects and moderate inflationary background in our trading partners,” Mr Akishev told journalists.
“Among internal factors there has been a significant slowdown in inflation, which creates lower inflationary and devaluation expectations amongst people, as well as the ongoing de-dollarisation of bank deposits.”
Inflation had been a major worry after the tenge devalued by 50% in 2015. It had started to rise fast last year but has since slowed and the Kazakh Central Bank said that it would ease to between 6.5% and 7% this year from 8.5% last year (Feb. 22). The Central Bank also said that inflation in 2018 could drop as low as 5%.
The Kazakh economy is the biggest in Central Asia and is an important driver of regional economic growth.
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(News report from Issue No. 318, published on Feb.24 2017)
