Tag Archives: GDP

Azerbaijan’s economy shrinks, recession looms

JULY 14 2016 (The Conway Bulletin) — Azerbaijan’s Statistics Committee said its GDP shrank by 3.4% in manat terms in the first half of 2016, compared to the same period last year, a reflection of the negative impact that sustained low oil prices have had on the country’s economy.

This confirms concern voiced by international economists and ratings agencies that the Azerbaijani economy was going to contract this year.

Data from the state Statistics Committee showed that Azerbaijan’s GDP shrank in the first quarter of the year and now, although the data is patchy, the statistics appear to suggest that the second quarter of the year also showed that Azerbaijan’s economy had shrunk.

Azerbaijan is particularly vulnerable to low oil prices. Roughly 40% of its GDP is directly derived from oil and gas revenues. The last time that Azerbaijan’s economy shrank was in 2011 when its oil and gas production slipped.

ENDS

(News report from Issue No. 289, published on July 15 2016)

Kyrgyzstan’s debt hits $4b

JULY 4 2016 (The Conway Bulletin) — Kyrgyzstan’s ministry of finance said the country’s debt had hit $4b, a level that parliament set in 2014 as the country’s debt ceiling. Foreign debt accounts for $3.7b of this amount. China’s Exim Bank, the World Bank’s International Development Association and the Asian Development Bank are among Kyrgyzstan’s largest creditors. Kyrgyzstan’s debt/GDP ratio has now surpassed 60%, a level that local politicians have said is worrying.

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(News report from Issue No. 288, published on July 8 2016)

Georgia’s economy grows by 2.1%

JUNE 30 2016 (The Conway Bulletin) — Data from Georgia’s state statistics agency Geostat showed that the economy had grown by 2.1% in the 12 months to end-May, a slow down from the 4.3% annualised growth to the end of April. Georgia’s government has estimated GDP growth of 3% for 2015. Like the rest of the region, Georgia has been dealing with the double dangers of a recession in Russian and a drop in oil prices.

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(News report from Issue No. 287, published on July 1 2016)

Georgia’s GDP rises

JUNE 20 2016 (The Conway Bulletin) – Georgia’s GDP grew by 2.6% in Q1 2016, driven by an increase in mining and construction activity, the Georgian Statistics Committee, Geostat, said. Large infrastructure projects have boosted Georgia’s GDP growth, which is still below the government’s expectation of full-year growth of 3%.

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(News report from Issue No. 286, published on June 24 2016)

IMF improves forecast for Azerbaijan’s shrinking GDP

JUNE 1 2016 (The Conway Bulletin) — Azerbaijan’s GDP will shrink by 2.4% in 2016, the IMF said in a statement after it sent a mission to Baku. The IMF improved its forecast, which had previously said that Azerbaijan’s GDP would fall by 3% this year. Sustained low oil prices have hit Azerbaijan’s growth. The IMF has urged structural reforms to accelerate the country’s diversification objectives but the Azerbaijani economy has remained stubbornly addicted to oil.

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(News report from Issue No. 283, published on June 3 2016)

Kazakhstan’s GDP shrinks

MAY 19 2016 (The Conway Bulletin) – Kazakhstan’s GDP shrank by 0.2% in the first quarter of 2016, the first dip in seven years, according to the Statistics Committee. Trade, telecoms, and industrial production slowed significantly. Analysts at Halyk Finance forecast that Kazakhstan’s GDP will grow by just 0.2% this year, the lowest growth since the 2008 Global Financial Crisis. Kazakhstan, like the rest of the region, is struggling to deal with the knock on effects of a recession in Russia and collapse in oil prices.

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(News report from Issue No. 281, published on May 20 2016)

Strong GDP growth, says Turkmen President

MAY 7 2016 (The Conway Bulletin) – Turkmen president Kurbanguly Berdymukhamedov said that the country’s GDP was 6.3% higher in January-April 2016 than the same period in 2015. The EBRD has predicted Turkmenistan’s GDP will increase by 6.5% this year and 7.1% in 2017. Last year, Mr Berdymukhamedov devalued the manat currency by 19% and imposed austerity measures, phasing out free gas supplies and other subsidies.

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(News report from Issue No. 280, published on May 13 2016)

Kyrgyzstan’s debt to GDP ratio grows

MAY 4 2016 (The Conway Bulletin) – Foreign debt has outpaced GDP growth in 2015 in Kyrgyzstan and pushed up the debt/GDP ratio to 70%, Edward Gemayel, IMF head of mission, told a press conference. Mr Gemayel also said that GDP growth will be 3% in 2016, lower than the 3.5% it registered in 2015. Debt/GDP ratio is a sensitive issue in Kyrgyzstan. In 2014, the IMF said, the ratio was around 45%.

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(News report from Issue No. 279, published on May 6 2016)

Georgia cuts interest rate for the first time in 3 years

TBILISI, APRIL 27 2016 (The Conway Bulletin) — Georgia’s Central Bank cut its key interest rate for the first time in three years, performing a policy U-turn designed to boost its flagging economy.

It cut its key refinancing rate by 50 basis points to 7.5%, having steadily raised it from 4% throughout 2015. It said this was the first step towards a rate of around 5 or 6%.

“The Monetary Policy Committee considers it necessary to start phasing out the tight monetary policy, which means the gradual reduction of the refinancing rate down to the neutral level in the medium-term,” the Central Bank said in a statement.

“The rate of further monetary policy softening will depend on the revised inflation forecasts.”

In March, annualised inflation fell to 4.1% from 5.6% in February.

The Central Bank also dropped the lari-denominated minimum capital requirements for its commercial banks from 10% to 7% and increased the US dollar-denominated requirements.

It did this to try to push more lari into circulation and to take the US dollar off the market.

Alongside the less-than-rosy economic news, the Central Bank said that there had been signs of improved economic activity, especially in construction, but that high interest rates and other issues were a brake on potential growth.

“Another factor keeping the economic growth low is the negative impact of the economic situation in Georgia’s trade partners, reflected in the decrease of remittances and weakening of external demand,” it said.

Russia and Greece have traditionally been Georgia’s main source of remittances. Russia is currently in a recession linked to low global oil prices and Western imposed sanctions. Greece’s economy remains in recovery-mode after the impact of the 2008/9 Global Financial Crisis.

Like inflation, GDP growth has also been sluggish. The Statistics Committee said GDP grew by 2.3% in Q1, one percentage point slower than the expectations. The Central Bank expects 3% GDP growth in 2016.

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(News report from Issue No. 278, published on April 29 2016)

Editorial: Georgia’s Central Bank

APRIL 29 2016 (The Conway Bulletin) – Georgia’s Central Bank sounded confident in its review of the country’s monetary policy, but looking at the data, the cheers are a bit more muted.

Yes, high interest rates have curbed inflation and stabilised the lari exchange rate — together with a few interventions in the currency market, that is — but economic activity and GDP growth have suffered.

The Central Bank has now hinted that the country needs to reach a new normal and said it will lower interest rates further in the next months.

Should Georgia be able to weather what analysts deem to be the last months of a two-year crisis, it could see growth pick up again in 2017.

The crucial issue, though, is how to boost the economy without pushing inflation too high.

Georgia is moving towards a more West-friendly economic environment, changing the tax code and giving incentives to foreign companies looking to set up shop in the country.

Both the IMF and the government now hope that their bet on the neo- liberal model will work.

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(Editorial from Issue No. 278, published on April 29 2016)