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Kazakhs are upbeat about economy

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ALMATY, FEB. 20 2017 (The Conway Bulletin) — Kazakhs are significantly less well off now because of the collapse of the tenge and price rises, the ranking.kz website reported, although the general feeling on streets of Almaty is one of cautious optimism that the worst of an economic downturn is over.

Ranking.kz said that on average, people’s purchasing power had dropped by 4.5% in 2016, the sharpest drop in the last 16 years. In 2009, during the Global Financial Crisis, ranking.kz said that people’s purchasing power dropped by 3.1%.

On the streets of Almaty, though, people appeared less concerned by their apparent drop in purchasing power. A Conway Bulletin correspondent said that economic sentiment had turned with the tenge finally strengthening against the US dollar, oil prices staying around $55/barrel and inflation slowing.

Iraina, 22, was hurrying along a frozen sidestreet clutching a bag of groceries.

“Honestly, no. Of course it was a noticeable increase in groceries prices but I do not restrain myself,” she said. “I have a good salary, whereas prices increased only by 20 to 30 tenge.”

For Bakyt Kasenovich, 68, even though there had been an obvious economic dip, life now was far better than it was in 1990s or 2000s.

“I would not say that our level of life decreased so much. We, most likely, just got used to a rise in prices. I would not say that Kazakhstan faces this heavy crisis now,” he said. “Anyway we live better than before.”

A survey by ACT, an FSU-focused research company, showed that in October 2016 84% of Kazakhs were generally upbeat about their personal finances. They also expected to have an even better financial scenario by April 2017.

ENDS

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(News report from Issue No. 318, published on Feb.24 2017)

Armenia’s economic activity rises

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FEB. 20 2017 (The Conway Bulletin) — Armenia’s economic activity index, considered a key barometer of the economy’s health, was 6.5% higher in January compared to a year earlier. A 12% rise in industrial production was the biggest driver of the economic boost. Importantly, though, agricultural output was largely flat.

ENDS

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(News report from Issue No. 318, published on Feb.24 2017)

Work permits for foreigners increase in Kazakhstan

FEB. 13 2017 (The Conway Bulletin) — Kazakhstan handed out over 36,700 work permits to foreigners last year, data from the PM’s website showed, an increase from 32,000 in 2015. China dominates with 12,699 permits, down from 13,373 in 2015. The issue of Chinese labourers working on energy and infrastructure projects part-funded by China is sensitive as ordinary Kazakhs accuse them of taking their jobs and receiving preferential treatment. After China, Turkish citizen received the second largest number of work permits in 2016 with 3,502.

ENDS

Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 317, published on Feb.17 2017)

Buy gold, not som, says Kyrgyz Central Bank chief

BISHKEK, FEB. 15 2017 (The Conway Bulletin) — In an interview with the Bloomberg news agency, Tolkunbek Abdygulov, head of the Kyrgyz Central Bank essentially told ordinary Kyrgyz that they should buy gold rather than keep their savings in the unpredictable Kyrgyz som.

Gold is considered a safe-haven for investors and savers whenever the global outlook is fragile but it holds added importance in Kyrgyzstan, which relies on the Kumtor gold mine to produce over a tenth of its GDP.

Like the rest of the region, an economic slowdown has hit the Kyrgyz economy, denting GDP growth and undermining the economy. The Kyrgyz som has slid from around 50/$1 to 69/$1.

Mr Abdygulov appeared to reference this som weakness in his interview with Bloomberg.

“Gold can be stored for a long time and, despite the price fluctuations on international markets, it doesn’t lose its value for the population as a means of savings,” he was quoted as saying.

Over the past couple of years, the Kyrgyz Central Bank has offered to sell gold in different sizes to ordinary Kyrgyz and to store it safely. Mr Abdygulov said that the Bank had sold around 140kg of gold through this system.

And the Central Bank appears to be leading by example. It has increased its purchases of gold while many other central banks have reduced theirs. Bloomberg data showed that Kyrgyzstan currently holds around $190m of gold in its reserves, four times the level of 10 years ago.

ENDS

Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 317, published on Feb.17 2017)

Armenia’s tumbling interest rate

FEB. 17 2017 (The Conway Bulletin) — >> How dramatic has these interest rates cuts been?

>> Very. Like a downhill skier racing to the bottom of the run, Armenia’s Central Bank have been determined and dogged. In mid-2015, the interest rate had been 10.5%. Now it’s at 6%, its lowest ever level. In November and December 2015, the Central Bank slashed rates by 1.75% but otherwise it has been a steady path, generally knocking off a quarter of a percentage every month or so.

>> But why has the Armenian Central Bank been in such a hurry to cut rates?

>> Basically, deflation has become the main driver of Armenian economic policy in the past couple of years. Price rises started to slow down in mid-2015, a sign of the tough economic times triggered by the recession in Russia. Within 12 months, prices had tipped into deflation. Earlier this month, the Central Bank said that although food prices had started rising again, non-food items were still dropping in price.

>> And what about going forward? Has there been any forward-looking guidance from the Armenian Central Bank?

>> A bit. The Central Bank has said that prices will remain soft in 2017 because the domestic economy is still limping along. It said non-food items, gas and electricity prices had all fallen in price. By cutting rates, it is trying to stoke economic activity. The risk is that a fall in interest rates will weaken the dram. It is now valued at 486/$1, its lowest since March 2016 and about 20% weaker than it was in mid-2014.

>> Is it a similar story in Georgia and Azerbaijan, Armenia’s neighbours?

>> Not exactly. In Georgia there has been some deflationary pressure on prices but not to the extremes seen by Armenia. Its Central Bank had also cut interest rates but it has now reversed this trend and actually put up rates last month. It also said that inflation would start rising this year. In Azerbaijan, as reported in The Conway Bulletin last week, prices are rising and fast. The major problem there has been the collapse in the currency. Azerbaijan is far more reliant on oil prices than Armenia or Georgia and has seen its currency halve in value over the past couple of years. This drop in the value of the currency has pushed up inflation.

>> What can Armenia do to stop deflation?

>> The deflation is slowly curbing itself. Food prices are rising and non-food prices are not falling as fast. Armenia’s economy closely follows Russia. The Russian economy is improving as oil prices rise, helping Armenia to recover too.

ENDS

Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 317, published on Feb.17 2017)

 

Armenia’s C.Bank cuts interest rate

FEB. 14 2017 (The Conway Bulletin) — Armenia’s Central Bank cut its key interest rate yet again to 6% from 6.25%, hoping to give its economy a boost. Armenia has now slashed its interest rate from 10.5% in 2015. The Central Bank’s biggest worry is deflation. Annualised deflation in January measured 0.6%, the Central Bank said.

ENDS

Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 317, published on Feb.17 2017)

IMF flies into Georgian capital

FEB. 15 2017 (The Conway Bulletin) — An IMF delegation flew into Tbilisi for a two-week mission that could trigger a major injection of cash linked to economic changes. Georgia has been one of the most reform-minded countries in the former Soviet Union acting as something of a posterboy for IMF- backed changes. The government, though, is also looking for support to push through a tough economic downturn. GDP growth in 2016 was 2.2%, its lowest since 2009 when the economy shrank by 3.8% during the Global Financial Crisis.

ENDS

Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 317, published on Feb.17 2017)

 

Currencies: Kazakh tenge

FEB. 17 2017 (The Conway Bulletin) — The Kazakh tenge continued to strengthen throughout the week, hitting 318.4/$1 at the close of play on Thursday. This is its highest level since December 2015 and represents nearly a 5% increase in its value in 2017.

Analysts have said that the tenge closely follows the Russian rouble, which has been strengthening throughout the year to 58.5/$1, a level not seen since mid-2015. The rising price of oil and stability around Ukraine and Crimea have helped to strengthen the rouble.

Kazakhstan’s economy, like the rest of the region, is closely linked to Russia’s. The free-float of the tenge in 2015 has allowed it to track the rouble more closely.

With this in mind, analysts have said that they expect a further strengthening of the tenge as it catches up with the rouble. Some have said that it’s not unreasonable to anticipate a value below 300/$1 for the tenge by the end of the year.

ENDS

Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 317, published on Feb.17 2017)

More jobs needed in Tajikistan, says World Bank

FEB. 14 2017 (The Conway Bulletin) — Tajikistan desperately needs to create more and better jobs if its economy is going to grow at a sustained rate, the World Bank said in a new report. In its report, the World Bank said that only 43% of Tajiks of working age were in the job market. Remittances sent home from workers, mainly in Russia, is the biggest generator of GDP growth for Tajikistan.

ENDS

Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 317, published on Feb.17 2017)

Bread prices rise in Kazakhstan

FEB. 14 2017 (The Conway Bulletin) — An informal study of bread prices by the ranking.kz website showed that prices have risen by 8-9% in the past year. This is important because the survey acts as a balance on official inflation data which has said that price rises have been more gentle. Economists have been predicting a jump in prices, linked to the devaluation of the tenge.

ENDS

Copyright ©The Conway Bulletin — all rights reserved

(News report from Issue No. 317, published on Feb.17 2017)