Tag Archives: economy

Kazakh President orders $712m economic stimulus

ALMATY, JUNE 15 2016 (The Conway Bulletin) — With economic activity in Kazakhstan faltering, President Nursultan Nazarbayev ordered his government to spend 240b tenge (around $712m) on supporting small and medium-sized companies as well as building thousands of new houses.

Mr Nazarbayev is under increasing pressure to shore up his support by boosting the economy against a 50% fall in the value of the tenge, rising unemployment and inflation. In April and May anti-government protests swept across the country in the most widespread anti-government challenge to Mr Nazarbayev’s 25-year rule.

The Presidential press service said the cash would come from the Republican budget, a phrase that Kazakh civil servants use to refer to Kazakhstan’s sovereign wealth fund.

ENDS

(News report from Issue No. 285, published on June 17 2016)

Emigration in Kazakhstan increases

JUNE 10 2016 (The Conway Bulletin) – Kazakhstan’s Statistics Committee said that immigration into Kazakhstan decreased by 25%, while emigration out of the country increased by 16% in the first four months of the year, highlighting a rapid outward pressure for Kazakhstan’s population. Net outflow measured 3,521 people. It did not give a reason for the high outflow but it may be connected to the poor economic conditions.

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(News report from Issue No. 285, published on June 17 2016)

Turkmenistan fails to pay salaries

JUNE 13 2016 (The Conway Bulletin) – Employees of Turkmenistan’s state-owned oil and gas companies said they have not received salaries for months, the opposition Alternative News Turkmenistan website reported. Previous reports had said that state employees had not received salaries and had been forced to accept state bonds instead.

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(News report from Issue No. 285, published on June 17 2016)

Georgia’s C.Bank cuts rates

JUNE 15 2016 (The Conway Bulletin) – Georgia’s Central Bank cut its key interest rate by half a percentage point to 7% to combat slowing inflation. In April, the Central Bank cut its key rate for the first time in three years to 7.5% from 8%. The Central Bank has said that it wants to push its interest rate down to around 5% – 6%, described as the country’ neutral rate, after raising it last year to defend its lari currency.

ENDS

(News report from Issue No. 285, published on June 17 2016)

Technopark costs in Kazakhstan rise

JUNE 8 2016 (The Conway Bulletin) — The Kazakh government said it will have to recalculate costs for the construction of a petrochemical technopark in a Special Economic Zone near Atyrau, due to the depreciation of the local currency. Nurlan Rakhmetov, managing director at Samruk-Kazyna, the country’s sovereign wealth fund, said costs will rise. As of June 1, the local consortium building the technopark has received 40.7b tenge ($120m) from the state budget.

ENDS

(News report from Issue No. 284, published on June 10 2016)

Russia’s Gazprom to invest in Kyrgyzstan

JUNE 6 2016 (The Conway Bulletin) — Russian PM Dmitri Medvedev said that state-owned gas company Gazprom will invest around $1.5b in Kyrgyzstan’s energy infrastructure and that it will cancel export duty on oil and oil products. Mr Medvedev made the statement while in Bishkek on an official visit. Oil and petroleum products make up 51.9% of Kyrgyz imports from Russia.

ENDS

(News report from Issue No. 284, published on June 10 2016)

Central Banks in Kazakhstan and Georgia fight deflationary pressures

ALMATY, JUNE 10 2016 (The Conway Bulletin) — Currencies across the Central Asia and South Caucasus region have stabilised this year after losing 30% to 50% of their value in 2015 thanks, in part, to record high interest rates but governments are now having to deal with deflation.

As well as raising interest rates to their highest level since the Global Economic Crisis of 2008/9, Central Banks bought heavily to defend their currencies. The Kazakh Central Bank said it bought $3.7b in Jan.-May 2016 and in Georgia, the Central Bank intervened twelve times in just two months, although on a smaller scale.

And both Central Banks have now started unwinding high interest rates, hoping to spark economic activity.

Earlier this year the Kazakh Central Bank cut its key interest rate to 15% from 17%. Georgia’s Central Bank cut its interest rate to 7.5% from 8% and promised further cuts. New data from Georgia’s statistics agency highlighted the challenge. It said that prices in May dropped by 0.4%, the third consecutive month of falling prices. Year-on-year inflation in May measured 2.1%, down from a high of 6.3% in November.

And this scenario is playing out across the region.

Last month Armenia’s Central Bank said that year-on-year inflation measured minus 1.9% and immediately cut interest rates by 0.5% to 7.75%.

But Alex Nice, an analyst at the Economist Intelligence Unit, said that the region’s weak banking systems and high levels of dollarisation means that there is little Central Banks can do to impact economic activity.

“The exchange rate is a more powerful lever for managing prices in the economy [than the official interest rate],” he said.

ENDS

(News report from Issue No. 284, published on June 10 2016)

Tourism income rises in Georgia

JUNE 8 2016 (The Conway Bulletin) — PM Giorgi Kvirikashvili said income earned from the tourist industry reached $1.94b last year, 8.3% more than in 2014. According to Mr Kvirikashvili, the number of incoming tourists increased by 14% in the first five months of the year, compared to 2015. This is important for Georgia, where tourism is a major part of its economy.

ENDS

(News report from Issue No. 284, published on June 10 2016)

FDI rises in Georgia

JUNE 9 2016 (The Conway Bulletin) — Foreign direct investment into Georgia in Q1 2016 measured $376m, roughly double the total of Q1 2015, the country’s statistics agency said. The communication and transport sector received the largest proportion of investments. The data suggests that Georgia’s economy is rebounding from a steep economic downturn last year that was triggered by a recession in Russia and a drop in oil prices.

ENDS

(News report from Issue No. 284, published on June 10 2016)

Azerbaijan readying a 2nd Eurobond

JUNE 1 2016 (The Conway Bulletin) — Azerbaijan’s state-owned Southern Gas Corridor company said it will issue a second $1b Eurobond by the end of 2016 or early next year, Bloomberg reported. The Southern Gas Corridor, which is in charge of a pipeline network that will connect Azerbaijan’s gas fields with European consumers by 2019, issued a $1b Eurobond in March. Sustained low oil prices have hit the financial feasibility of several large infrastructure projects across the region.

ENDS

(News report from Issue No. 283, published on June 3 2016)