Tag Archives: economy

Despite promises, oil output falls in Azerbaijan

SEPT. 30 2015 (The Conway Bulletin) – Azerbaijan’s oil production fell by 3.1% between January and August this year compared to the same period in 2014, a source at the state’s Statistics Committee told Reuters, more bad news for the government as it tries to work out a strategy to deal with a regional economic downturn.

Oil exports are the mainstay of the Azerbaijan economy, and a collapse in oil prices over the past year has hit it hard.

It has cut government projects, slashed the value of its currency by a third and warned of low growth rates for the next couple of years.

Alongside the decline in revenue earned from exports, Azerbaijan is also dealing with a drop in production. This drop is mainly linked to a slowdown in production at the Azeri-Chirag-Guneshli (ACG) fields which are operated by BP.

The source told Reuters that Azerbaijan had produced 22.1m tonnes of oil in the first eight months of the year compared to 22.8m tonnes in 2014.

BP has tried to increase outflows from ACG over the past couple of years but without success, drawing criticism from Azerbaijani President Ilham Aliyev.

ENDS

(News report from Issue No. 250, published on Oct. 2 2015)

GDP growth slows for Georgia

SEPT. 30 2015 (The Conway Bulletin) – Preliminary GDP data for August showed that growth in Georgia measured 2.3% compared to the same month in 2014, the Georgia statistics agency said. This was the slowest year-on-year GDP growth since May.

ENDS

(News report from Issue No. 250, published on Oct. 2 2015)

Falling Kazakh tenge hits charities

OCT. 1 2015, ALMATY (The Conway Bulletin) — The collapse in the value of the Kazakh tenge over the past 18 months has not only hurt businesses and consumers in Kazakhstan. Charities that collect cash in tenge but accrue costs in US dollars and other foreign currencies are also having to cut services — often life-saving ones.

In an interview with The Conway Bulletin, Ilyas Kubriyanov, head of the UnityKZ charity, said that the cost of sending ill children abroad for treatment had spiralled.

“We are having problems, of course, as foreign hospitals invoice in dollars but we collect 90% of our donations in tenge,” he said. “Consequently, the cost of treatments is increasing.”

UnityKZ helps pay for children who have cancer or other serious illnesses to travel abroad for treatment. Mr Kubriyanov, who set up the charity in 2009, said that there are currently 10 children waiting for treatment.

“Because of the currency situation, the money we collect loses its impact,” he said. “Everything has become much more expensive.”

The Kazakh Central Bank released the tenge from its US dollar peg in August, triggering a sharp devaluation. It is trading at around 272/$1 compared to 188/$1 on Aug. 19.

It also devalued its currency in February 2014. The tenge is now worth nearly half its Feb. 2014 value.

A sharp drop in oil prices and a recession in Russia has battered economies in Central Asia and the South Caucasus. Statistics show unemployment and inflation rising but the impact is felt across Kazakh society.

“Recently, we asked parents of sick children to think about another type of treatment to have or another country to aim for,” Mr Kubriyanov said. “One child was transferred to China recently, but they also have some difficulties with their currency there.”

ENDS

(News report from Issue No. 250, published on Oct. 2 2015)

Armenian reserves fall

SEPT. 29 2015 (The Conway Bulletin) – Currency reserves held by Armenia’s Central Bank have dropped to $1.646b from $1.703b at the start of the month, despite it insisting that it was not intervening in the currency market to support the dram. A year earlier, the CBank’s currency reserves measures $1.75b.

ENDS

(News report from Issue No. 250, published on Oct. 2 2015)

Remittances slow for Armenia

SEPT. 29 2015 (The Conway Bulletin) – Remittances to Armenia from abroad dropped by 38.8% in the first eight months of the year to $114.8m compared to the same period in 2014 , the Armenian Central Bank said. Russia provides nearly 80% of all Armenia’s remittances. It has been coping with the fallout from a collapse in oil prices and sanctions.

ENDS

(News report from Issue No. 250, published on Oct. 2 2015)

Currency: Kazakh tenge, Kyrgyz som

OCT. 1 2015 (The Conway Bulletin) — It’s hard to believe that Kazakhstan has really moved to a free-floating currency market. The roller-coaster of the past 40 days has hit the Central Bank’s credibility. Investors and citizens alike are wary of the potential consequences of their tenge-denominated portfolios.

And over the last two weeks, the Central Bank has sold around $1b to keep the tenge away from the frightening 300/$1 floor it momentarily touched on Sept. 16.

The tenge has since traded at around 271/1$. In August, the Central Bank chose to move away from a dollar peg of around 188/$1 to avoid draining its reserves. Now, it seems, the tenge has found another, unofficial, peg.

In other countries, the situation was fairly stable this week. The Kyrgyz som kept its rate through the week at around 69/$1. The Georgian lari held below 2.39/$1.

In Tajikistan, the Central Bank seems to be allowing a weekly 0.5% decline for the somoni, now at around 6.5/$1.

And finally, in a recent Central Bank survey, 41% of Tajikistan’s population is in favour of letting the somoni float free.

ENDS

(News report from Issue No. 250, published on Oct. 2 2015)

Markets: Interest rates up in Kazakhstan, Kyrgyzstan and Georgia

OCT. 2 2015 (The Conway Bulletin) — The three countries in the Central Asia and South Caucasus region with currencies floating freely (or partially so) have all increased their key interest rate.

Kazakhstan was the last to do so, bringing its key interest rate to 16% from the previous level of 12%. The 12% mark had only been set at the start of September, highlighting just how seriously the Kazakh Central Bank had underestimated the threat from inflation in its initial calculations. The Kyrgyz Central Bank raised its benchmark rate to 10%, up by 2 percentage points. Last week, Georgia increased rates to 7% from 6%.

The bottom line is that all three countries fear inflation. Kyrgyzstan has tried to hold off, while the Central Bank intervened lightly in the currency market to defend the som, but both foreign trade and remittances from abroad have declined, putting the Kyrgyz economy in an uncomfortable position.

Although probably necessary, these measures might not be enough to avoid climbing inflation in the coming months.

ENDS

(News report from Issue No. 250, published on Oct. 2 2015)

Kyrgyzstan increases interest rate

SEPT. 29 2015 (The Conway Bulletin) – Kyrgyzstan’s Central Bank increased its key interest rate by 2% to 10% to combat rising inflation. The Kyrgyz interest rate has yo-yoed this year. It started at 10.5%, rose to 11%, was cut to 9.5% and then to 8% before being increased again.

ENDS

(News report from Issue No. 250, published on Oct. 2 2015)

Azerbaijan’s manat declines

SEPT. 29 2015 (The Conway Bulletin) – Pressure is building on Azerbaijan’s Central Bank to allow its manat currency to decline gently rather than prop it up by spending billions of its US dollar reserves. Vahid Ahmadov, an MP and deputy head of parliament’s economy committee, questioned the current US dollar peg for the manat. The CBank devalued the manat by a third in Feb.

ENDS

(News report from Issue No. 250, published on Oct. 2 2015)

IMF raises Armenia’s 2015 GDP growth rate

SEPT. 26 2015, YEREVAN (The Conway Bulletin) — The International Monetary Fund (IMF) raised its economic growth forecast for Armenia in 2015 to 2.5% from an earlier 1% projection, Mark Horton, the IMF mission chief to Armenia, told a news conference.

Although the upward revision of Armenia’s growth forecast will be welcomed by officials and will give the government some breathing space as it tries to navigate its way through an increasingly deep regional economic crisis, Mr Horton emphasised that the revision was due to a handful of one-off factors.

“Among the non-recurrent factors which will not happen next year are the launching of a copper factory, unprecedented favourable climate conditions and the good results from the agriculture sector,” he told journalists at a press conference.

Armenia’s agriculture ministry said earlier this month that the sector had grown by nearly 15% in the first seven months of the year compared to the same period in 2014. Also, a new copper mine that started operations at the end of 2014 has contributed to a 35% increase in overall metals and mining output.

ENDS

(News report from Issue No. 250, published on Oct. 2 2015)