Tag Archives: GDP

ADB warns Tajikistan of poor economic outlook

MARCH 24 2015 (The Conway Bulletin) – The Asian Development Bank (ADB) sent a warning to all Central Asian economies, and in particular to Tajikistan, in its Asian Development Outlook report.

Landlocked and dependent on remittances from migrant workers, Tajikistan is particularly vulnerable to the present economic crisis, the ADB said.

The ADB said Tajikistan is expected to experience a deceleration in its GDP growth. This had averaged 9% between 2010-14 but will fall to 5%.

“The decline in remittances and the traditional exports of aluminum and cotton slowed growth in 2014 and inflation worsened to 6.1%,” it said.

The ADB is also expecting rampant inflation and a further devaluation of the somoni currency by 6.5%.

Remittances, mostly from Tajik workers in Russia, represent roughly half of its GDP. The rouble crisis has affected both the value of those transfers and the capacity of these workers to retain their jobs. The ADB also said that new legislation for migrant workers in Russia will hit Tajikistan’s earnings.

“Remittances will likely contract further in 2015 as new regulations require that migrants to the Russian Federation have Russian language proficiency, as well as medical tests and health insurance that are estimated to cost about $500 per Tajik migrant,” it said.
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(News report from Issue No. 224, published on March 25 2015)

Georgia’s economy grew in 2014, says stat office

MARCH 20 2015 (The Conway Bulletin) – Officially, Georgia’s economy grew by 4.8% in 2014, up from 3.3% in 2013, the Georgian national statistics office said. Georgia has been enjoying growth for a few years. Economists have predicted a slowdown, though, because of a regional economic trough.
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(News report from Issue No. 224, published on March 25 2015)

Azerbaijan’s economy will grow by 1.5% -EBRD

MARCH 17 2015 (The Bulletin) – Azerbaijan’s economy will probably grow by 1.5% in 2015 despite a downturn in regional conditions, Reuters quoted EBRD economist Dmitry Gvindadze as saying. He said Azerbaijan’s oil fund, worth $50b, had created a buffer that meant Azerbaijan could weather the economic storm.
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(News report from Issue No. 223, published on March 18 2015)

Azerbaijan slips towards recession

MARCH 16 2015 (The Bulletin) – Azerbaijan’s GDP in January was nearly 17% lower than for the same month in 2015, the Central Bank said in its monthly report on the state of the economy.

In January, Azerbaijan generated receipts worth 3.63b manat ($3.46b) compared to 4.36b manat in January 2014. This means that Azerbaijan is slipping towards a recession.

The Central Bank slashed the value of the manat by 33% last month and most media in Azerbaijan, which is generally pliant and pro-government, spun the drop as a rise in real GDP because of the devaluation.

Many economists disagreed, though. Samir Aliyev, an economist at the Center for Assistance to Economic Initiatives in Baku, said this heavy drop in GDP is more evidence that the combined impact of the drop in global oil prices and also the downturn in Russia’s economy have hit Central Asia and the South Caucasus hard.

“We witnessed such a big drop only in 2008 and 2009 during the global economic crisis, when oil prices slipped down,” he said. “However, to call it a recession we should have numbers for at least three months.”

The trickle-down effect of the collapse in oil prices from the summer of 2014 — prices fell by around 50% — has only just begun to seriously dent Azerbaijan’s economy. January was the first month that GDP dropped.

Data from the Central Bank also showed that Azerbaijan’s non-oil economy — which international economists said needs to grow — increased by 5%.
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(News report from Issue No. 223, published on March 18 2015)

FDI in Georgia jumped 39% in 2014

MARCH 15 2015 (The Bulletin) – Preliminary data from Georgia’s statistics agency, Geostat, showed that foreign direct investment (FDI) jumped by 39% to 1.3b last year.

This is the highest level of FDI since 2008 when Georgia experienced an economic boom before a short war against Russia curtailed investor confidence in the country.

Geostat wasn’t able to give specific reasons for the sharp increase in FDI in 2014. FDI is vitally important in Georgia and the statistics showed how Georgia’s economic conditions had improved this year.

The data, though, doesn’t reflect the worsening economic conditions over the past months.

Economic turmoil in Russia and a drop in the price of oil have hit the region, knocking growth rates and denting currencies. This has trickled through to Georgia. FDI levels are expected to fall again this year.
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(News report from Issue No. 223, published on March 18 2015)

IMF says that Georgia is well placed to weather financial storm

MARCH 5 2015 (The Bulletin) – Severe external shocks have hit Georgia’s economy causing it to falter and for growth to slow to a virtual standstill, the IMF said at the end of a mission to Tbilisi.

But the IMF said that because Georgia has been able to keep its government budget deficit under control it is better placed than other countries in the region to weather the economic storm triggered by a decline in oil prices and the drop in Russia’s economic health.

“We look forward to plans to accelerate reforms to make Georgia a more attractive place for doing business and for investing, for creating jobs, and for boosting growth in the future,” the IMF said in a statement.

“These should include easing recent restrictions on foreign businesses, seeking out new private investment, boosting saving through pension and capital market reforms and raising education standards.”

It also gave a much needed boost to Georgia’s Central Bank chief Giorgi Kadagidze who has been criticised for not doing enough to divert the country from a decline in the value of its lari currency.

“We need to protect independence of the central bank; they are doing a good job,” media quoted Mark Griffiths, who led the IMF mission as saying.
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(News report from Issue No. 222, published on March 11 2015)

Kyrgyzstan-bound FDI dries up

MARCH 6 2015 (The Bulletin) – According to a recent publication by the Kazakhstan/Russia-funded Eurasian Development Bank (EDB), foreign investment in Kyrgyzstan in 2014 measured only $187m, down by 70% from 2013.

In 2013, the Central Asian country received over $623m in foreign direct investment (FDI), mainly from China, Russia, Britain, and Canada.

The EBD said the macroeconomic downturn which began in early 2014 was the main reason for the reduction of foreign activity. The recurring threat of nationalising the gold mine at Kumtor, together with monetary issues and galloping inflation, are also all factors.

The Kyrgyz government has tried to remedy the situation by increasing interest rates above 10% and protecting the national currency, the som, from the financial strains common throughout the region. Although it has performed better than the rouble, the som has lost over 20% against the dollar in the past six months.

FDI is a lifeline for countries like Kyrgyzstan, which rely on remittances from migrant workers abroad and capital injections from foreign investors.
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(News report from Issue No. 222, published on March 11 2015)

Armenian economic growth falls

FEB. 27 2015 (The Conway Bulletin) – Armenia’s economy grew by 3.4% in 2014, lower than the expected 5.2%, the country’s statistics office said quoting preliminary data (Feb. 27). The economies of Central Asia and the South Caucasus suffered from a general downturn in the second half of last year due to falling oil prices and problems in Russia’s economy.
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(News report from Issue No. 221, published on March 4 2015)

Kumtor gold production falls

FEB. 19 2015 (The Conway Bulletin) — In its annual report, the Toronto-based Centerra Gold said that its Kumtor mine in eastern Kyrgyzstan produced 10% less gold in 2014 than it did in 2013.

Kumtor is not only important to Centerra Gold, which also has other assets, but is also vital to the economic health of Kyrgyzstan. It is the country’s largest single asset and contributes around 10% of its total GDP.

Already reeling from the fallout from Russia’s sanction-hit economic slowdown, the news from Centerra Gold that, although expected, gold production at Kumtor had fallen will be a another big blow to Kyrgyzstan.

Centerra Gold said gold production in 2014 was around 620,000 ounces, down from 690,000 ounces.

Kumtor has been a headache over the past few years. Kyrgyzstan wants to assume more control over the gold mine, while Centerra Gold has been fighting to retain its share.

Strikes and protests caused part of the drop in production at Kumtor.

Centerra Gold CEO, Ian Atkinson said of negotiations with the Kyrgyz government over Kumtor ownership: “We are in the process of negotiating the definitive agreements to implement the restructuring as described in the Heads of Agreement signed on January 18, 2014 and are continuing discussions with the Kyrgyz Government in this regard.”

(News report from Issue No. 220, published on Feb. 25 2015)

Tajik migrants head home

FEB. 22 2015 (The Conway Bulletin) — The falling rouble has persuaded up to half of St Petersburg’s Central Asian casual work force to return home, the AFP news agency reported.

St Petersburg’s deputy governor, Igor Albin, reportedly said that 50% of the snow sweepers, normally from Central Asia, had left the city.

AFP’s correspondent in St Petersburg directly quoted the head of a snow sweeping company who gave similar insight, although with a lower percentage heading home.

“Almost 30% of the workers who left to spend New Year’s as usual with their families in Uzbekistan or Tajikistan have not come back,” he said.

Uzbekistan, Kyrgyzstan and Tajikistan are most vulnerable to this trend. Tajikistan holds the dubious position as the country that is most reliant on remittances. These make up about 50% of its total GDP.

The Tajik Central Bank has tried to prop up its currency against the falling Russian rouble although it has warned that inflation is creeping up.

In Dushanbe, an immigration official told AFP that only half the number of Tajiks were leaving to take jobs abroad this year, compared to the same period in 2013.
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(News report from Issue No. 220, published on Feb. 25 2015)