MARCH 11 2016 (The Conway Bulletin) – Foreign direct investment (FDI) into Georgia measured $1.35b in 2015, a drop of around 23% from 2014. FDI is an important part of Georgia’s economy. It is, generally, volatile but the sharp fall may be indicative of an overall slump in economic conditions in the region.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 271, published on March 11 2016)
MARCH 9 2016 (The Conway Bulletin) – Georgia’s Central Bank kept interest rates steady at 8%, saying that inflation was due to slow and dip into its target zone. Like the rest of the region, Georgia has been increasingly worried about inflation pressure building up in its economy. Prices and salaries have been rising as the value of the lari has fallen. Overall inflation in February was 5.6%.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 271, published on March 11 2016)
MARCH 11 2016 (The Conway Bulletin) – Kazakhstan is AvtoVAZ’s largest export market but a duty introduced at the start of the year by the Kazakh government to support its car making industry, has, apparently, destroyed it.
The number of AvtoVAZ cars delivered to the country jumped in 2015 due to the tenge-rouble currency imbalance for the first part of the year.
From the end of 2014 the rouble started collapsing, but the Kazakh Central Bank stubbornly kept the tenge at 185/$1.
This made imports very cheap, undermining Kazakhstan’s own carmaking industry but boosting AvtoVAZ.
In the first half of 2015, car sales were down by one-third. For the year, sales were down 40% to 97,446 units, the lowest level since 2012.
Even President Nursultan Nazarbayev weighed in and said that it was wrong for Kazakhs to buy cheaper products abroad and push the domestic industry out of the competition.
The Kazakh government also looked into subsidising the local automotive sector and impose import duties — an issue that must surely have raised concerns for both the World Trade Organisation and the Eurasian Economic Union.
The new $2,000 car import tax has also had an almost immediate effect. It has made imports unsustainable. It has simply priced them out of the market, denting consumer choice and, also, Kazakh- Russian relations.
Kazakhstan and Russia are supposed to be allies. The Eurasian Economic Union, a Kremlin project, was supposed to protect the area from interventionist duties. Where was it when Kazakhstan said it was going to impose its $2,000 import levy on car imports.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 271, published on March 11 2016)
MARCH 4 2016 (The Conway Bulletin) – Azerbaijan’s Central Bank raised its key interest rate to 7% from 5% to support its manat currency, the second interest rate increase in less than a month. It increased rates on Feb. 15 to 5% from 3%. The manat currency has lost 50% of its value in the past year. This is the highest rate since 2009.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 271, published on March 11 2016)
MARCH 9 2016, ALMATY (The Conway Bulletin) — Non-performing loans, a major signifier of the banking sector’s economic health, have started to rise again in most large Kazakh banks, data showed.
Other than Kazkommertsbank, which wrote-off swathes of non-performing loans last year after it merged with debt-ridden BTA Bank, only Halyk Bank of the big lenders improved its loan portfolio in 2015.
Halyk Bank is owned by business- man Timur Kulibayev and his wife Dinara Nazarbayeva, daughter of Kazakh Pres. Nursultan Nazarbayev. Tsensabank, Bank Centre Credit and the Kazakh subsidiary of Russia’s Sberbank all saw the ratio of non- performing loans in their portfolios worsen.
Kazakhstan is sensitive to the proportion of non-performing loans held by its banks because after the 2008/9 Financial Crisis it was considered to have one of the worst ratios of bad to good loans in the world.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 271, published on March 11 2016)
BISHKEK, MARCH 9 2016 (The Conway Bulletin) — Kyrgyzstan’s finance minister Adylbek Kasymaliyev asked the Eurasian Fund for Stabilisation and Development to double its aid to $427m to help the country weather both an economic downturn and the impact of joining the Kremlin-led Eurasian Economic Union.
Remittance inflows to Kyrgyzstan have fallen by 40%, the som currency has lost 25% of its value and major infrastructure projects have been cancelled over the past six months.
Mr Kasymaliyev said Kyrgyzstan had already spent more than the $255m of loans and grants that the Fund, managed by the Eurasian Development Bank had given it.
“We have already surpassed our limit of $255m by allocating $260m. For this reason, we have asked the Council to raise the limit to $427,” Mr Kasymaliyev told local media.
The funds will be used for a range of projects, including agriculture.
Importantly, though, analysts said that although Kyrgyzstan needed to protect itself against the regional economic crisis, it was under extra pressure from its entry last August into the Eurasian Economic Union. The government said the trade block, which includes Russia, Kazakhstan, Belarus and Armenia, would improve conditions for Kyrgyz business.
Instead, though, businesses have complained it has exposed them to unfair competition.
Ayilchy Sarybayev, an analyst based in Bishkek, said the cash would be used to subsidise Kyrgyz farmers.
“The fund is being raised because small and medium enterprises cannot compete with Kazakh and Russian ones now,” he said. “Kyrgyz entrepreneurs have started buying (more expensive) agricultural equipment from Kazakhstan and Russia (rather than from China).”
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 271, published on March 11 2016)
MARCH 9 2016 (The Conway Bulletin) – Utility tariffs in Kazakhstan were 11.2% higher in February this year compared to February 2015, the state statistics agency said. The biggest cost rise was a near 20% increase in sewage charges imposed on households. Heating and hot water prices have risen by nearly 6% and rubbish collection by around 5%. The data is more evidence of a rise in the cost of living in Kazakhstan after the currency lost around 50% of its value last year.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 271, published on March 11 2016)
FEB. 26 2016 (The Conway Bulletin) – Ratings agency Standard & Poor’s downgraded the credit ratings for Baiterek Holding from BBB-/A-3 to BB+/B. S&P said “the likelihood of extraordinary government support to the consolidated Baiterek group [is] almost certain”. It said its negative outlook mirrors that of the agency’s latest assessment of Kazakh sovereign credit. Baiterek’s subsidiaries include the Development Bank of Kazakhstan and the Investment Fund of Kazakhstan.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 270, published on March 4 2016)
MARCH 4 2016 (The Conway Bulletin) – The economic downturn that has hit Central Asia and the South Caucasus in the past two years has dented people’s purchasing power.
Most people earn salaries in their local currency but these have lost between 50% and 25% of their value in the past months.
This has triggered some social unrest, especially in the South Caucasus. In January, people in Azerbaijan took to the streets to protest against rising food prices and stagnating wages.
The same reasons were voiced by miners in Tkibuli, Georgia, who went on strike for two weeks asking for a 40% increase in salaries. Now reports have emerged from Yerevan where market stall owners briefly scuffled with police over rental prices.
In Central Asia, protests are less frequent and, generally, silenced quickly by the authorities. Last month, however, dozens of Kazakh women banging pots and blowing whistles protested in Almaty about mortgage repayments.
The crisis is starting to bite hard and the people are growing increasingly restless.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(Editorial from Issue No. 270, published on March 4 2016)
FEB. 29 2016 (The Conway Bulletin) – Kazakhstan’s Central Bank imposed new rules for exchanging tenge into US dollars in an effort to bolster its tenge currency, which has lost around half its value in the past 12 months. From now, Kazakhs will have to present photo ID if they want to exchange more than 1m tenge ($2,860) into any foreign currency. This is half the previous level.
ENDS
Copyright ©The Conway Bulletin — all rights reserved
(News report from Issue No. 270, published on March 4 2016)
