Tag Archives: economy

GM Uzbekistan sales fall

FEB. 10 2016 (The Conway Bulletin) – GM Uzbekistan sold 1,269 cars in Russia in January, down 37% on the same period in 2015, media reported quoting the Automobile Manufacturers Committee of the European Business Association which releases data on sales. Russia is GM Uzbekistan’s main market. GM Uzbekistan is important because it is one of the few relatively successful projects with Western business in Uzbekistan. Low oil prices have caused a recession in Russia which has impacted the rest of the region.

ENDS

(News report from Issue No. 267, published on Feb. 12 2016)

Kyrgyzstan bans dollar mortgage

FEB. 10 2016 (The Conway Bulletin) – Kyrgyzstan’s Central Bank said that it had banned commercial banks from handing out US dollar mortgages to customers. The ban is designed to stop the economy from accruing more bad debt. Like its neighbours the Kyrgyz som has been under increased pressure to devalue. Over the past couple of months, the Central Bank has intervened heavily in the currency markets to protect its value but analysts have said that this policy is unsustainable and a devaluation is inevitable.

ENDS

(News report from Issue No. 267, published on Feb. 12 2016)

Kazakh president orders spending spree

FEB. 10 2016 (The Conway Bulletin) – Kazakh president Nursultan Nazarbayev ordered his government to spend more than 360b tenge ($1b) building houses and supporting small and medium-sized businesses, a policy he hopes will both stimulate Kazakhstan’s flatlining economy and cement support for his Nur Otan party ahead of parliamentary elections next month.

His plan also involves trying to protect both Kazakhstan’s $4b national pension pot by diversifying investments into other currencies and second tier banks by buying up their bonds, a form of financial aid.

With more data showing that low oil prices and a devalued currency have dragged down Kazakhstan’s economy, Mr Nazarbayev appears to have decided that now is the moment to be bold.

“Many countries have found themselves in a difficult situation and are forced to cut social spending, suspend projects, resulting in rising unemployment. Yet we continue building industrial facilities and open new markets,” he told a government meeting. “At the centre of all my orders are the needs of the common man, his well-being and stability.”

Three government financial insti- tutions — the Baiterek Holding company, the House Building Bank of Kazakhstan and the Samruk Kazyna sovereign wealth fund — will admin- ister funds for the house building spending spree, official media reported. The $1b will come from pushing cash earmarked for a social spending in 2017 forward by a year.

Mr Nazarbayev likes to act the father figure, looking after the Kazakh people during times of hardship. This showed through with his emphasis on looking after the common man. He said that his spending plans would create 18,000 jobs, build 42 new schools and extend and improve the electric grid system.

“Full and effective utilisation of funds allocated for the implementation of these measures will stimulate economic activity, support employment and add 1% into economic growth in 2016,” he said.

If Mr Nazarbayev needed a reminder of the battle he faces to turn around the economy, it came from the Central Bank. It said the country’s deficit measured $5.3b in 2015, a result of the currency depreciation. The tenge halved in value in 2015.

ENDS

(News report from Issue No. 267, published on Feb. 12 2016)

Kazakhstan posts current account deficit

FEB. 10 2016 (The Conway Bulletin) – Kazakhstan posted a $5.3b current account deficit in 2015, the Central Bank said. The balance of payments in Kazakhstan has been in the red for six consecutive quarters now. The Central Bank said a sharp drop in the price of oil has cut the value of Kazakhstan’s main export. The new Central Bank figures show a 42.6% drop in the US dollar value of Kazakhstan’s exports in 2015, compared to the previous year.

ENDS

(News report from Issue No. 267, published on Feb. 12 2016)

Azerbaijani bank declares bancruptcy

FEB. 8 2016 (The Conway Bulletin) – Texnikabank became the fourth commercial bank in Azerbaijan to declare bankruptcy since the Central Bank started to withdraw licences from those banks it considers to be too small or weak. The Central Bank has previously said that people with savings of up to 30,000 manat ($19,000) will be fully compensated if their savings bank goes bankrupt. In January, Azerbaijan withdrew the licence for at least eight banks to operate because they fell below the required minimum capitalisation limit. Those banks have been choosing whether to merge or to go bankrupt since then.

ENDS

(News report from Issue No. 267, published on Feb. 12 2016)

Azerbaijan’s President dismisses tax code

FEB. 10 2016 (The Conway Bulletin) – Azerbaijani President Ilham Aliyev refused to sign into law a bill that would have imposed a 20% tax on all foreign currency investments, media reported, an apparent U-turn on a much-heralded government strategy unveiled last month to head off a worsening currency crisis. Azerbaijan’s currency lost around half its value in 2015 and the Central Bank has been under pressure to stop businesses cashing out of manat into other currencies. By refusing to sign the bill, though, Mr Aliyev is effectively saying that law- makers and the Central Bank have to re-think their policies.

ENDS

(News report from Issue No. 267, published on Feb. 12 2016)

IMF says Azerbaijan is well placed to deal with economic downturn

FEB. 3 2016 (The Conway Bulletin) – The IMF said it would increase technical support to Azerbaijan after a week-long mission that focused on whether or not to give an emergency loan to help Baku ride out worsening economic conditions.

Concluding its trip to Baku, the IMF mission also said the government was well-placed to deal with the economic downturn.

It made no mention of a potential $4b emergency loan that media had previously reported was being negotiated.

“Looking ahead, economic growth and balance of payments pressures are likely to remain major challenges for the authorities in the near term,” the IMF said in a statement.

Azerbaijan’s economy is reliant on oil exports. Its currency has fallen by a third in the past month, inflation is speeding up and discontent is rising.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

Kazakh President tells people not to panic

JAN 29 2016, ALMATY (The Conway Bulletin) — At a televised conference for his Nur Otan political party, a stony faced Kazakh President Nursultan Nazarbayev played down a 50% drop in the value of the tenge currency and told viewers to look at the economic positives.

Mr Nazarbayev likes to act the elder father figure during times of economic and political strife in Kazakhstan and with oil prices at a 12- year-low, government spending being cut and inflation rising, Mr Nazarbayev clearly thought it was time to calm the increasingly jittering nerves of his countrymen.

“We have been living with $30 per barrel oil for half a year now and nothing has happened. We will overcome (this) and maybe we should get used to this, I think it has come here to stay,” he told the 2,000 assembled delegates.

Kazakh officials know that they are treading a thin line and are eager to head off any sign of discontent.

In Azerbaijan, unease at the economic malaise triggered several clashes between protesters and police in regional towns last month but in Kazakhstan, the authorities have been able to dampen public frustration.

Judging the public mood — when to be firm and when to be conciliatory — is a key skill during this time of economic hardship and one that Mr Nazarbayev has previously shown that he is adept at.

Last month, Mr Nazarbayev called a parliamentary election for March, 18 months early. Analysts said that this had been arranged so that Mr Nazarbayev and his officials could hold an election now, before the economic situation worsened further.

At the Nur Otan conference, though, Mr Nazarbayev avoided mention of the election and instead told Kazakhs that the government was working hard to look after them.

“We support our working population through implementation of the Employment Roadmap-2020 Program. There is no place for unemployment in Kazakhstan. We have all resources in place to avoid it,” he said.

Official unemployment figures in Kazakhstan are considered unreliable. Correspondents in Kazakhstan, though, and reports from various regional towns suggest that people are losing their jobs.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

Inflation increases in Georgia

FEB. 3 2016 (The Conway Bulletin) – Annualised inflation in Georgia rose to 5.6% at the end of January, the state’s statistics agency said, an increase from 4.9% in December. Inflation increased steadily in Georgia last year hitting 6.3% in November, fuelled by a drop in the value of the Lari currency, until it dropped off slightly. By comparison, in January 2015, annualised inflation had been 1.4%.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)

Kyrgyzstan imposes fines for USD

FEB. 3 2016 (The Conway Bulletin) – Kyrgyzstan’s anti-monopoly said it would start to impose fines against shops, companies and people selling products in US dollars rather than the local som currency. The new rules appear designed to boost the use and the strength of the Kyrgyz som. The som has lost around a third of its value.

ENDS

(News report from Issue No. 266, published on Feb. 5 2016)