Tag Archives: economy

Georgia sees no threat to bumper exports from EEU

TBILISI, APRIL 8 2017 (The Conway Bulletin) — The Russia-led Eurasian Economic Union (EEU) trade bloc has not damaged Georgia’s exports, Mariam Gabunia, head of the department for foreign policy at the Georgian economy ministry, told The Conway Bulletin in an interview.

Instead she said that Georgia was on course for a bumper year with exports rising strongly after a dip last year linked to tough economic conditions in Russia, Central Asia and the South Caucasus.

Some analysts have said that the EEU, which is essentially a trade bloc including Russia, Kazakhstan, Belarus, Armenia and Kyrgyzstan, would hurt those who didn’t sign up — including Georgia. Ms Gabunia, though, waived aside this notion.

“In general, we do not see any negative impact on Georgia’s trade with regard to the EEU,” she said. “We are part of the CIS free trade agreement and Belarus and Kyrgyzstan are part of it. On top of that we have bilateral FTA (free trade agreements) with Russia, Armenia and Kazakhstan.”

Ms Gabunia’s comments are important because it is one of the first times that a senior official from a government outside the EEU has commented on whether the bloc has hit regional trade. Many businesses within the bloc have been complaining that the extra bureaucracy and the bias towards the larger members have created problems.

Georgia is, to a large extent, still reliant on trade with its former Soviet neighbours. One of the biggest boosts to its economy over the past few years was repairing relations with Russia. Last year it was Georgia’s biggest export market with $200m of sales.

And Ms Gabunia said that bilateral agreements made in the 1990s underpinned Georgia’s trade within the former Soviet Union, taking precedence over EEU rules.

“According to the legislation of the EEU the FTA that were concluded before the creation of the EEU will stay in force. and we had FTA with all these countries before the EEU was created,” she said.

This year has started strongly, mainly because of much improved macroeconomic conditions in Georgia and the rest of the region. Ms Gabunia said that trade relations with Russia had improved along with political relations.

“As far as concerns the other EEU members, the situation is improving,” she said.

“Exports to Belarus increased by 61% in the first two months of 2017, for example.”

According to Geostat, Georgia’s biggest exports are copper ore, ferroalloys, wine, medicines and cars.

ENDS

(News report from Issue No. 324, published on April 13 2017)

Armenian GDP growth to be higher than expected

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APRIL 12 2017 (The Conway Bulletin) — The IMF increased its expected GDP growth in Armenia in 2017 to 3% from the 2.7% it had forecast in December. It said that growth had been strong in the first quarter of the year, at 6%, mainly due to higher than expected foreign capital expenditure. The IMF said that it forecast inflation of 2% for 2017. Armenia has been fighting deflation over the past year.

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(News report from Issue No. 324, published on April 13 2017)

Uzbek government set up to attract investments

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APRIL 13 2017 (The Conway Bulletin) — Uzbek president Shavkat Mirziyoyev has signed a law on setting up a government unit specifically to attract foreign investment, media reported. The State Committee for Investments will also be tasked with ensuring that the foreign investment is directed properly. President Shavkat Mirziyoyev, in power since September last year, has said that he wants to attract more foreign investors.

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(News report from Issue No. 324, published on April 13 2017)

Food prices rise in Turkmenistan

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MARCH 31 2017 (The Conway Bulletin) — The Turkmen government has ordered shopkeepers to raise their prices by 20%, as a kind of unofficial tax to help the state pay for the Asian Indoor and Martial Art Games which it is hosting later this year, the Radio Free Europe/Radio Liberty website reported. It quoted an opposition website and also ordinary people from Ashgabat as saying prices had risen by between 20% and 50% this year on various foodstuffs.

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(News report from Issue No. 323, published on April 6 2017)

Comment: The green shoots of a recovery are visible

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APRIL 6 2017 (The Conway Bulletin) — In Edinburgh, where The Conway Bulletin has its editorial HQ, the green shoots of a timid spring are finally beginning to breakthrough after a long, grey winter.

And it’s the same scenario for the economies of Central Asia and the South Caucasus. A deep, bleak winter has enveloped them since mid-2014 but now, finally, data suggests a revival is on the horizon.

In this week’s newspaper, we report that both the Kyrgyz and Armenian Central Banks have kept their key interest rates steady. This, in itself, is a victory. Armenia has been furiously cutting its rates from a high of 10.5% in 2015 to 6% to try to stimulate growth and beat deflation. Now it says this policy has gone far enough and that inflation of around 4% is predicted this year.

In Kyrgyzstan, the economic news is even more upbeat. In its statement explaining just why it had kept interest rates steady, the Central Bank said that it was no longer having to intervene in the money market to keep the som currency from sliding. It also said that the economy had grown by 5.4% in January and February compared to the same period in 2016.

Armenia and Kyrgyzstan are two of the smaller economies in the region but the larger economies are also reporting positive news.

In Georgia, the statistics agency said that the economy had grown by 4.8% in the first two months of the year, pushed up by a growth in exports and an all- important rise in remittances. Georgia may also be benefiting from several local factors. Improved relations with Russia have given exports a major boost, especially wine, and the scrapping of visa regulations for Iranians has encouraged a large rise in tourists and business trips.

For the region’s two major economies the data has been less flattering, although there are still signs of improvements. In Azerbaijan, there is disagreement between economists on whether its economy will grow or not after it shrank by 3.8% in 2016. It’s dependent on oil, and prices are currently hovering around $50/barrel, above the anticipated $40/barrel.

In Kazakhstan, the Central Bank last month cut its interest rate and gave its most upbeat assessment of the economy, pointing out that inflation was under control and growth was expected.

And if you’re still not convinced about those green shoots of economic recovery, and that’s understandable as, just like a Scottish spring, they are fragile, take a look at the Azerbaijani manat and the Kazakh tenge. They are both up against the US dollar by more than 5% this year.

By James Kilner, Editor, The Conway Bulletin

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(News report from Issue No. 323, published on April 6 2017)

Inflation slows in Georgia

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APRIL 3 2017 (The Conway Bulletin) — Price inflation in Georgia measured 0.5% in March, Geostats said, a sharp fall from 1.7% in February. The fall pushed overall annualised inflation down slightly to 5.4% in March from 5.5% in February. The Central Bank has said it is targeting overall inflation for 2017 of around 4%. Like the rest of the region, Georgia is recovering from a sharp economic downturn linked to a recession in Russia.

ENDS

(News report from Issue No. 323, published on April 6 2017)

Kyrgyz economy is improving, says C.Bank

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MARCH 27 2017 (The Conway Bulletin) — Kyrgyzstan’s Central Bank kept its key interest rate steady at 5%, half the level it was 12 months ago, citing an improvement in the economy and a slowdown in inflation. Importantly it said that the economy had grown in the first two months of the year and that the som currency had stabilised without the Central Bank’s interference. Currencies and economies in the Central Asia/South Caucasus region have been hit hard since 2014 by a recession in Russia and fall in oil prices.

ENDS

(News report from Issue No. 323, published on April 6 2017)

Currencies: Tajik somoni

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APRIL 6 2017 (The Conway Bulletin) — Tajikistan’s somoni currency keeps on hitting all-time lows. The Central Bank has managed a fall in its value since 2014 that has seen its worth half to 8.23/$1. At the start of 2014, the somoni was valued at 4.77/$1.

But, the rate of the fall may actually be good news. In July last year the Central Bank published a gloomy assessment of the somoni’s outlook. It said that the somoni would fall by 21% in 2017 and by another 8% in 2018. Of course there is some way to go, but in the first three months of the year the Tajik somoni has fallen just over 4%. This means that if the current fate of depreciation is maintain, the somoni will come in slightly better than expected.

Like the rest of the region, Tajikistan’s economy has been hit hard by the recession in Russia, it is officially the most remittance- dependent country in the world and most of this comes from Russia. The EBRD and the ADB have offered to help Tajikistan but require reforms.

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(News report from Issue No. 323, published on April 6 2017)

Georgian economic growth accelerates

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MARCH 30 2017 (The Conway Bulletin) — Georgia’s economy grew by 4.8% in the first two months of the year compared to the same period in 2016, Geostat said. It said that a rise in remittances, mainly from Russia, and an increase in exports had boosted economic growth. The Georgian economy has weathered the economic downturn that has hit the region since 2014 better than its neighbours.

ENDS

(News report from Issue No. 323, published on April 6 2017)

Investors set up club in Armenia

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MARCH 27 2017 (The Conway Bulletin) — In a major boost to Armenia’s business-friendly PM, Karen Karapetyan, 36 Armenian millionaires living in Russia said that they would chip into a new fund designed to kick-start business in Armenia. At a signing ceremony in Yerevan, Mr Karapetyan said that the Investors Club of Armenia would help to stimulate further economic growth. It will also have helped give Mr Karapetyan and his Republican Party a boost ahead of an election on April 2. The Investors Club has not yet named any target projects.

ENDS

(News report from Issue No. 323, published on April 6 2017)