Tag Archives: inflation

Azerbaijan raises fuel prices

>>People in Baku worry that fuel price rises may also accelerate inflation>>

JAN. 12 2015 (The Conway Bulletin) — Oil prices may be falling on the world market but in Azerbaijan the cost of filling your car with either petrol or diesel has actually increased.

The government announced that it was putting the price of fuel up by 0.02 manat to 0.7 manat ($0.9) for a litre of petrol and 0.62 manat for diesel.

This sounds like a marginal increase only but, given the 50% drop in oil prices, actually represents a sharp rise.

Independent observers say that this is another attempt to fill the state budget, so dependent on oil revenue, with cash.

The government, though, has said the price increase was due to the inclusion of a road tax on oil products produced in Azerbaijan for domestic consumption, as well as imported from abroad.

In a suburb of Baku, 52-year-old taxi driver Ahmed Huseynov was waiting for customers at a taxi rank. It was a damp, dreary afternoon. The roads and rooftops were sodden and slippery after the first snows of the year.

“Every day we hear on the news that oil prices are decreasing which logically should have led to a decrease in fuel prices too,” he said. “I don’t understand the government’s decision.”

Azad Gayibov, 38, a school teacher and father of two, said the fuel price increases will mean careful budget planning for his family. “It does not mean an increase in fuel prices only, but also a deterioration in the entire economy.”

ENDS

(News report from Issue No. 214, published on Jan. 14 2015)

Markets: Inflation worries Central Asia and South Caucasus countries

JAN. 8 2016 (The Conway Bulletin) — Currency woes in 2015 quickly translated into inflation across the South Caucasus and Central Asia.

Kazakhstan can be singled out as the worst performer in this department as inflation grew by a staggering 13.6% in 2015.

It was only in November that the minister of economy Yerbolat Dossayev said inflation wouldn’t surpass 10% in 2015. He was clearly wrong.

Interestingly, food prices grew significantly in Kazakhstan (+10.9%), while in Kyrgyzstan it was precisely food items that kept inflation from going too high.

Kyrgyzstan’s 11-month inflation in 2015 was 6.8% overall, but food prices decreased by 4.8% (Jan. 5).

Geostat, the Georgian statistics service, said annual inflation amounted to 4.9% in December, a 0.6% deflation compared to the previous month driven by lower transport and fuel prices, another impact of low oil prices.

ENDS

(News report from Issue No. 262, published on Jan. 8 2016)

Inflation climbs in Tajikistan

>>Central Bank has already increased interest rates this year>>

DEC. 29 2014, (The Conway Bulletin) — Inflation in Tajikistan jumped to over 7% in 2014, the Central Bank said, around double the rate in 2013.

The final figures for the year are not yet out but the Central Bank said annualised inflation up to the end of November had been 6.8% and that this would creep up again when December’s data was analysed.

Tajikistan raised its interest rates in October to 6.9%, its highest level since 2012, up from 4.8% earlier in the year, to try and steady its economy against rising inflation.

With remittances from Russia, which contribute to around 50% of GDP, dropping because of a slowdown in the Russian economy, Tajikistan is facing up to an increasingly tough time.

News that inflation is rising just adds to the headache.

ENDS

(News report from Issue No. 213, published on Jan. 7 2015)

Bread prices rise in Armenia

DEC. 8 2014 (The Conway Bulletin) – Bread prices have begun to rise for the first time since March, Armenian media reported. Armenia’s economy has been hit by the downturn in Russia’s economy. Commentators said that the rise in bread prices was directly attributable to an increase in the price of flour.

ENDS

(News report from Issue No. 212, published on Dec. 10 2014)

Inflation rises in Kazakhstan, again

DEC. 2 2014 (The Conway Bulletin) – Inflation in Kazakhstan is beginning to edge up to the psychologically important double digit zone. The Kazakh statistics committee said prices rose by 0.7% in November after a 0.5% increase in October.

This is a precarious position for the Kazakh Central Bank. Annualised inflation already measures 7.6%. It won’t be long, if the current trend continues, until it hits 10%.

The problems are two two-fold and well-known — Russia and the drop in the price of oil.

These two issues have combined to produce something of an economic storm for Kazakhstan. And its options are limited. The Central Bank devalued — without warning — its tenge currency by 20% in February. For its currency to retain any credibility, it has had to pledge to protect it from further devaluation.

There is already a lot of economic uncertainty in Kazakhstan. Rising inflation is adding to that.

ENDS

(News report from Issue No. 211, published on Dec. 3 2014)

Rouble slide hits Kazakh industry

NOV. 28 2014 (The Conway Bulletin) – The depreciation of the Russian rouble has hit Kazakhstan’s energy sector, media reported.

Kazakh media said Samruk-Energo, the state-owned energy company, had cancelled rouble-denominated contracts with Russian clients.

“We have suspended power supplies over the lingering Russia’s currency devaluation. Supplies are no longer economically viable for Kazakhstan-based power plants. Loss of the markets is an important issue,” media quoted Almasadam Satkaliyev, head of Samruk-Energo, as saying.

This is important as it shows how Kazakh industry is beginning to lose out from a depreciating rouble. It’s an issue that could threaten to upset otherwise close relations between the two neighbours.

Kazakhstan has signed up to the Russia-led Eurasian Economic Union and has a host of other friendly treaties in place.

The problem is that the Kazakh Central Bank has pledged not to devalue its currency after knocking 20% off its value earlier this year. This means that Kazakhstan will have to look elsewhere to sell its power or accept a vastly reduced price.

Mr Satkaliyev also said that Kazakhstan was looking to replace coal supply contracts with Russian clients.

“Russia’s economy is not ready to import Kazakhstan’s coals at higher prices. Russia has adopted a program to replace Kazakhstan’s coal,” he said.

“A second factor is the continuing devaluation of the Russian rouble. All the contracts rely on the Russian rouble; therefore for the Kazakh side it is of great importance to ensure economic viability of supplies.”

ENDS

(News report from Issue No. 211, published on Dec. 3 2014)

Kyrgyz inflation rises

DEC. 1 2014 (The Conway Bulletin) – The devaluation of the manat, the Kyrgyz currency, and slowing economic growth have combined to push inflation in Kyrgyzstan up to 8.5%, the World Bank said in a report quoted widely by local media. The World Bank also said that it expected inflation to keep rising towards 10%. This could mean social trouble.

ENDS

(News report from Issue No. 211, published on Dec. 3 2014)

Inflation rising in Tajikistan

NOV. 26 2014 (The Conway Bulletin) – Prices of basic food products are rising in Dushanbe, local media reported, because of a fall in the value of the Tajik somoni. Tajik news agency Asia-Plus reported that a bag of flour now sold at 175 somoni, up from 165 somoni a week earlier, and that vegetable oil cost 44 somoni up from 40 somoni.

ENDS

(News report from Issue No. 211, published on Dec. 3 2014)

Food prices rising in Uzbekistan

NOV. 12 2014 (The Conway Bulletin) – The Uzbek sum currency has fallen to its lowest levels against the US dollar in independent Uzbekistan’s 23 year history, pushing up the price of food and threatening social stability.

On the Black Market, an essential measure of currency rates, the exchange rate in Tashkent hit the 3,450 sums to $1. The skyrocketing currency price is a mirror of Russia’s economic troubles.

A Tashkent resident told the Conway Bulletin that a kilogram of mutton now costs between 25,000 and 30,000 sums, compared to 20,000 sums in the summer.

Prices of bread, sugar and grain-based cereals have also risen by roughly 25% over the past three months, he said.

“As if the recent increase in utility costs was not frustrating enough, the government’s inaction to stem price increases because of a foreign currency adds insult to injury,” the source said.

The Tashkent resident was referring to a 10% increase imposed by the government on utility prices on Oct. 1.

This insight is important because it provides a first- hand snapshot of how frustration is building in Uzbekistan over food price increases and the rising cost of utilities.

Ordinary Uzbeks have also had to put up with fuel and gas shortages. Social pressure is building.

ENDS

(News report from Issue No. 209, published on Nov.19 2014)

Kazakh tenge celebrated a not-so-happy birthday

NOV. 19 2014 (The Conway Bulletin) – In Kazakhstan, November 15 is the Day of the National Currency, a little-known holiday for workers in the financial sector.

With the Kazakh tenge under pressure again despite a 20% devaluation earlier this year, they and the national currency will be grateful for the rest.

The tenge was born in 1993, after Kazakhstan’s independence from the Soviet Union.

It had a bumpy ride with initial inflation, matching concerns about the viability of an independent Kazakhstan. The exchange rate against the dollar jumped from an initial 4.75 to 35 within two months.

A dollar peg provided some stability — even if it was shaky — for the tenge during the second half of the 1990s but the Russian and Asian crises forced a new market- driven devaluation. Between April and September 1999, the tenge lost one third of its value against the greenback.

A corner, though, was turned at the start of the 21st century and with Kazakhstan maturing as a country so did its currency. Fiscal responsibility helped keep down inflation in the early 2000s, oil prices slowly rose, giving Kazakhstan’s fledging energy sector a boost.

Then came two devaluations of 20%. The first in Feb. 2009 and the second five years later.

With the US Federal Reserve easing its policy of cheap money and preparing to raise interest rates, pressure on emerging currencies, including the tenge, is likely to increase.

Aged 21, the tenge has already had an eventful existence.

ENDS

(News report from Issue No. 209, published on Nov.19 2014)