OCT. 20 2015 (The Conway Bulletin) – Azerbaijan’s government said its economy would grow by only 1.8% next year compared to 4.4% this year because of low oil prices and a drop in production. Parliament also approved a national budget for 2016 of 14.6b manat ($13.9b), down by 10.4% from last year.
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(News report from Issue No. 253, published on Oct. 23 2015)
OCT. 7 2015 (The Conway Bulletin) — Analysts in Kazakhstan have revised their inflation expectations down to 7.1% this year after official data showed that the consumer price index grew by only 1% in September.
Halyk Finance researchers said the numbers are much more encouraging than what they forecasted. This should keep inflation within the Central Bank target of 6-8%. Central Bank chairman Kairat Kelimbetov said he doesn’t rule out the possibility of a further increase in interest rates, after a new rate was set at the end of last week.
The Eurasian Development Bank (EDB) said in a report that Kyrgyzstan’s economy is poised to grow by 1.8% this year. This came after PM Temir Sariyev disclosed more optimistic numbers, pointing out that in Jan.- Sept. 2015, the country’s economy grew by 6%. The EDB said it expects a marginal slowdown in economic activity in Q4 2015.
The IMF has dramatically increased its forecast for Azerbaijan’s growth in 2015, from a meagre 0.6% in April to 4% in its latest report.
The international lender also revised inflation expectations downwards from 7.9% to 5% for 2015, more good news.
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(News report from Issue No. 251, published on Oct. 9 2015)
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.
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(News report from Issue No. 250, published on Oct. 2 2015)
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.
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(News report from Issue No. 250, published on Oct. 2 2015)
SEPT. 22 2015 (The Conway Bulletin) — The Asian Development Bank published an updated Outlook for the economies of Central Asia and the South Caucasus, downgrading growth prospects across the region.
The ADB set growth for 2015 at 3.3%, down from an earlier forecast of 3.5% and the organisation says inflation will hit 8.1% this year, triggered by the latest devaluing of the Kazakh tenge and the Kyrgyz som. In Kazakhstan, in particular, “the new exchange rate is expected to dampen consumption and investment further,” the ADB said. A worrying outlook.
The trend for lower capital investments across the region, however, could be reversed in 2016-17, according to the ADB. The governments will play a major role as drivers of future growth as the main source of investments for years to come.
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(News report from Issue No. 249, published on Sept. 25 2015)
SEPT. 22 2015 (The Conway Bulletin) – International ratings agency Moody’s lowered its growth prediction for Kazakhstan in 2016 to 2% from 2.2%. Moody’s kept its forecast for 2015 steady at 1.5%. Low oil prices have hit Kazakhstan’s budget and its ability to generate revenues.
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(News report from Issue No. 249, published on Sept. 25 2015)
SEPT. 25 2015 (The Conway Bulletin) – The Georgian Central Bank is one of the more open central banks in the region. It holds scheduled meeting and posts reasonably detailed explanations on its monetary policy decisions.
In short it can give people interested in Central Asia and the South Caucasus something of an insider’s view of things. This makes its statement on Sept. 23 that accompanied an interest rate rise all the more important.
And the Georgian Central Bank was blunt in its assessment of the problems facing the wider region.
“Real GDP growth in the second quarter was consistent with the forecasts,” it said. “The factor hindering growth is the external sector, which, given the dire economic situation in the region negatively affects export of goods and services.”
Of course the Georgian Central Bank was talking about poor GDP growth in Georgia but the more important word in this statement for the wider region was “dire”. The Georgian Central Bank had said what other government economists from Tajikistan to Kazakhstan to Azerbaijan and Armenia have been thinking but shying away from saying. The prospects for their economies, with inflation rising and the values of their currencies falling, is dire.
Of course there are differences between the various regional economies – Kazakhstan and Azerbaijan are heavily dependent on oil and gas sales, for example, while Georgia isn’t – but many of the pressures are shared ones and if one Central Bank, in this case the Georgian one, starts describing the situation as “dire” it is important to listen.
By James Kilner, Editor, The Conway Bulletin
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(News report from Issue No. 249, published on Sept. 25 2015)
SEPT. 16 2015 (The Conway Bulletin) – The IMF increased its GDP growth forecast for Uzbekistan to 6.8% from an earlier estimate of 6.2% although it also raised its inflation forecast to over 10%. The increase in inflation will all but cancel out any real GDP growth increase in Uzbekistan this year.
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(News report from Issue No. 248, published on Sept. 18 2015)
SEPT. 9/10 2015 (The Conway Bulletin) — Between January and July this year, Canada increased its flow of Foreign Direct Investment into Kyrgystan by 90 times.
For Canada, read Centerra Gold, the Toronto-listed company that is part-owned by the Kyrgyz government. It owns the Kumtor gold mine in the east of the country, Kyrgyzstan’s main economic driver.
And it seems that this investment and the subsequent 49% increase in gold exports has helped Kyrgyzstan to post GDP data in Jan. – Aug. 2015 that shows growth of 7% from the same period last year. If capital flows are encouraging, however, foreign trade has shrunk significantly. The volume of import-export fell by 15% in the first 7 months of 2015.
In 2015, the fall of the som currency has led to lower purchasing power for Kyrgyzstan, and the government recently announced that Kyrgyzstan will inevitably face inflation for the next few months.
But as long as foreign investors retain their confidence in Kyrgyzstan, the country will be able to defend itself from the growing regional economic crisis.
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(News report from Issue No. 247, published on Sept. 11 2015)
AUG. 31 2015 (The Conway Bulletin) – Armenia’s GDP grew by 4.4% in H1 2015, media quoted PM Hovik Abrahamyan as saying. This is better than analysts had predicted. Mr Abrahamyan said an increase in agriculture exports had helped offset a drop in economic conditions triggered by the fall in the dram currency.
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(News report from Issue No. 246, published on Sept. 4 2015)
