NOV. 14 2016 (The Conway Bulletin) — Kazakhstan cut its key interest rate by 50 basis points to 12%, its fourth cut since May, as it looked to give industry a boost. The Central Bank said more cuts were likely but that these came with a potential inflation risk. The Central Bank had raised rates to a high of 17% in February to counter inflation.
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(News report from Issue No. 305, published on Nov. 18 2016)
NOV. 9 2016 (The Conway Bulletin) — In the first ten months of 2016, consumer prices in Armenia decreased by 3.1%, the country’s Statistics Committee said. Importantly, food prices decreased by 6%. Deflation in the country has continued throughout the year, although October registered inflation of 0.5% compared to September. Low economic activity has depressed prices in Armenia and could hinder growth.
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(News report from Issue No. 304, published on Nov. 11 2016)
NOV. 10 2016 (The Conway Bulletin) — Kazakhstan’s Central Bank said its international reserves fell by 2.9% in October to $30.5b, the first decline in four months. Since the beginning of the year, reserves have grown by 13.8%, the Central Bank said. Last year the Central Bank spent a large proportion of its reserves trying to prop up its currency. This year, though, under a new Central Bank chief, the strategy has changed and the Bank has stepped away from intervention.
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(News report from Issue No. 304, published on Nov. 11 2016)
ALMATY, NOV. 8 2016 (The Conway Bulletin) — The Kazakh government will gives subsidies of 15m tenge ($43,455) to mortgages for new homes, Marat Idryshev, head of the Association of Kazakh Constructors said, part of President Nursultan Nazarbayev’s plan to breathe life into Kazakhstan’s flatlining economy.
Mr Nazarbayev announced the Nurly Zher programme in September, the name means Bright Land in Kazakh, a few months after a series of unprecedented anti- government protests focused on mortgages and land ownership showed just how frustrated ordinary Kazakhs were with the state of the economy.
Precise details of the $1.3b plan to re-energise Kazakhstan’s construction sector have been thin, so Mr Idryshev’s comments are important. He said that the mortgage market was severely undernourished in Kazakhstan.
“Today the proportion of mortgages given by commercial banks in Kazakhstan is no higher than 5%,” he told media. “In Russia it is 50-70%, a world standard. We will act in accordance with the experience of our neighbours. The government will subsidise mortgages.”
The subsidy should, Mr Idtzhev said, bring interest on mortgages down to around 10% from 17%.
The collapse of the tenge last year made it difficult for mortgage holders to pay back their loans. Almaty-based economist Zharas Akhmetov said the plan should dampen growing tension.
“This, firstly, will support the housing market. Secondly, this will remove tension in society,” he told the Bulletin. “One of the drivers of economic growth is construction, and not only construction of houses but also roads and industrial objects.”
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(News report from Issue No. 304, published on Nov. 11 2016)
OCT. 27/28 2016 (The Conway Bulletin) — Under orders from Azerbaijani President Ilham Aliyev to seek out more economic opportunities, economic development minister, Shahin Mustafayev, travelled to Tbilisi to meet his counterparts and mull over various deals.
The meeting is important because it shows how Azerbaijan is looking to boost economic links with its immediate neighbours to help it through an economic downturn. As well as increasing trade with Georgia, Azerbaijan has reached out to Iran and Russia.
Official data showed that last year Azerbaijan invested a record $500m into Georgia’s economy. SOCAR, its state-owned energy company, is one of the most highly visible brands in Georgia with 120 fuel filling stations. Pipeline politics have also brought the two neighbours closer. Georgia is a host country for various oil and gas pipelines running from Azerbaijan’s Caspian Sea coast to Turkey and Europe.
And after their meeting in Tbilisi, Georgian officials said that they expected trade between the two countries to increase further.
“Businessmen of Azerbaijan and Georgia will soon start joint business projects to move forward the economy of the two countries,” media quoted Maya Mikeladze, a Georgian Presidential adviser, as saying.
Analysts were more cautious, though. Natig Jafarli, an Azerbaijani economist and opposition activist, said that in current economic conditions a boost in business deals was unlikely. Georgia was still important to Azerbaijan, though.
“Georgia is a window to Europe for Azerbaijan and a major transit corridor,” he said. “Baku will continue to play a vital role in the economy of Georgia.”
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(News report from Issue No. 303, published on Nov. 4 2016)
OCT. 28 2016 (The Conway Bulletin) — Kazakhstan’s Central Bank aims to hire foreign managers to oversee spending of the foreign currency- denominated element of its pension fund, worth around $5b. The hiring process could kick-start next year, according to one source at the Central Bank. Foreign currency-denominated assets make up around 21% of the $20b pension fund. The Central Bank aims to increase the share to 23% this year.
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(News report from Issue No. 303, published on Nov. 4 2016)
ALMATY, OCT. 29 2016 (The Conway Bulletin) — Official statistics showed that there are now more people working in Kazakhstan’s state sector than in private business, a reflection of how the economic downturn has cut into the job market.
The State Statistics Committee said that 51% of the total labour force in Kazakhstan now worked in the public sector, up from 46% in 2014 and 47% in 2015.
The jump in the proportion of the labour force working in the public sector, though, is only partially driven by an rise in state sector jobs.
The main driver has been a cut in the number of jobs in private enterprise.
Accurate data on these job losses is patchy but anecdotally there are many stories of cuts.
Madina Kuan quit her job at a media firm to look for a better one.
“I thought it would be easy to find a new one but I’ve now been jobless for six months,” she said. “My brother, as well, works in the oil sector in west of Kazakhstan and his company doesn’t have a job for him. They did not fire him though but instead just asked him to wait until things improve.”
A sharp fall in oil prices and a recession in Russia triggered a collapse in Kazakhstan’s currency. Despite fighting talk from the government, inflation has grown and businesses have been cutting staff.
The finprom.kz website has reported that the number of people employed by Kazakh private businesses has shrunk but that the public sector has increased the number of hires.
Kuralay Orazgeldy, who used to work in Almaty’s department of budget planning said people were attracted to public sector jobs because of the stability.
“Turnover is very high, staff changes often,” she said. “The salary is stable, everything is paid on time and often workers are rewarded but I can’t say that salary equals to the volume of work.”
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(News report from Issue No. 303, published on Nov. 4 2016)
OCT. 29 2016 (The Conway Bulletin) — Uzbekistan’s three special economic zones will be ruled under a single, unified legal and tax regime, a presidential decree said. Uzbekistan’s government is trying to improve its business climate and this involves providing more transparent and consistent rules for special economic zones in Navoi, Angren and Jizzakh. It sees the SEZs as critical for attracting foreign investment. Korean Air has a transport hub, for example, at the Navoi SEZ.
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(News report from Issue No. 303, published on Nov. 4 2016)
NOV. 2 2016 (The Conway Bulletin) — Kazakhstan’s Statistics Committee said inflation had risen by 0.6% in October, pushing up prices that had stabilised in previous months. Since the beginning of the year, prices have risen an average of 6.2%. The Central Bank has said that it wants to contain inflation between 6% and 8%. Last year, inflation in Kazakhstan reached double digits.
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(News report from Issue No. 303, published on Nov. 4 2016)
NOV. 1 2016 (The Conway Bulletin) — Azerbaijan sent 84,700 tonnes of oil to Belarus, the country’s first commercial energy exports to Belarus since short-lived swaps in 2010/11. Belneftekhim, the Belarusian buyer, will use Azerbaijani crude at its Mozyr refinery. Belarus is actively seeking alternative suppliers of oil as Russian shipments have failed to meet domestic demand. Azerbaijan’s oil was sent through Georgia’s Supsa port to Odessa in Ukraine and then on to Belarus.
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(News report from Issue No. 303, published on Nov. 4 2016)
