Browsing documents in Country Profile
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Technology in Belarus
Smart City spending less than planned. Belarus announced plans for an ambitious Smart City program almost five years ago but has implemented very few projects since since.
US$10 bln available for technology projects. There are, however, several major initiatives underway, some funded by World Bank and EU agencies, aimed at improving telecom services, renewable energies, transportation links and the environment.
Uzbekistan Update: The newest investment frontier
Waiting for a debut Eurobond. Uzbekistan will issue a debut Eurobond very quickly, once it receives an international credit rating. The process of getting a rating is ongoing and ministers hope it will be completed by the autumn and a debt issue done by the year-end.Possibly US$1 bln issue. The size range indication is US$300 mln to US$1 bln. Neighboring Tajikistan successfully raised US$500 mln last year but US$1 bln would suit Uzbekistan much better. It is on a fast-track reform path and would probably like to make a strong statement on international markets to reflect this.
Kazakhstan Update: The Twin Peaks Challenge
Strong growth based on oil. Kazakhstan’s economy grew by 4% YoY last year (from 1% in 2016) and looks set to replicate that strong growth again this year. The key driver of last year’s recovery and this year’s expected growth is the combination of rising oil output and the oil price recovery.
Uzbekistan: Playing catch-up is neither a sprint nor a marathon
Uzbekistan is playing catch-up with the rest of the CIS and Eurasia after 25 years of isolation. President Mirziyoyev and his team have moved surprisingly quickly with some key changes that should yield a positive knee-jerk reaction from investors. But the “to-do” list remains long and daunting.
Ukraine: An economic & political obstacle course
Strong GDP recovery in 2016. Economic recovery accelerated into the end of last year, GDP expanding by 4.7% YoY in Q4. That brought full-year growth to 2.2%, reversing the near 10% contraction of 2015. That trend continued into 2017 but much of it is based on one-off factors.
Blockade a cause for concern. The trade blockade with Donbass is a concern; if it remains for long enough, it will hurt the economy. 2017 growth scenarios range from 1.5% to 3.0%. We have adopted a cautious approach with 2.1% for 2017, rising to 3.0% in 2018.
Agriculture has been a big winner. Ukraine became the third-largest exporter of agricultural goods to the EU last year. Its grain harvest increased 27.5% YoY in 2016.
State debt at 76% of GDP. At end-December, total external state debt equaled approximately 76.5% of last year’s GDP.
Kazakhstan: 3-D Printing a New Economy
Radical changes. After spending several years of trying to mitigate the impact of the currency collapse and economic slowdown, the government has adopted a radical program to try and revive the economy and attract a bigger volume of inward investment. This includes: Higher budget spending and a 3% deficit; Build up debt and take more money from the National Fund; Take the bad assets from banks into a Bad Bank; Tackling high-level corruption; Changes in government; Constitutional changes aimed at calming concerns over succession.
3rd phase of modernization. The Nurly Zhol modernization program has been re-invigorated with the aim of creating much greater diversification in the economy and boosting the role of SMEs.
3-D printing and food processing. Key target industries include agriculture, food processing, transport & logistics, financial services and technology. The government has particularly highlighted 3-D printing as an industry in which it wants to see Kazakhstan take a lead.
Ukraine’s economy has now stabilized and is showing a slow but steady recovery. GDP is set to expand by 1.2% this year and by 2.5% next year. That follows a decline of almost 10% in 2015. One of the big success stories has been the large cut in headline inflation from over 43% at the end of last year to under 8% this summer. It is expected that the pace will pick up in the autumn and winter but it should stay close to the NBU’s target of 12% (+/-3%). This has allowed the NBU to cut its refinancing rate from 22% at the start of the year to 15% in mid-September.
Investors reacted with relief to the outcome of the 29 June general election in which the Mongolian People’s Party (MPP) won 85.5% of the seats. The opinion polls had predicted a close contest between the MPP and the incumbent Democratic Party (DP). That outcome would have resulted in political and policy paralysis, a greater risk of debt default in 2017-18 and stalled FDI flows.
Iran Country Profile
The signing of the Joint Comprehensive Action Plan between Iran and the P5+1 group in July 2015 concluded 18 months of negotiations. This will allow Iran to develop its nuclear industry in a way that satisfies Western powers, and in return the West will unlock the sanctions imposed on Iran. The sanctions regime was loosened as the negotiations progressed, and brought modest GDP growth of 1.5% YoY in 2014 driven by a recovery in crude oil production and oil export growth, and, more importantly, a recovery in industrial production.
Armenia Country Profile
Economy vulnerable to Russia’s recession. Armenia’s economic performance will be poor this year because of the impact of the Russian ruble collapse and because of an expected drop in remittances from Armenian workers in Russia. In 2013, these remittances contributed over 21% of GDP, while for 2015 the contribution is expected to fall below 15%. Real GDP growth, which exceeded 7% in 2012, is expected to be only 1% for this year. The IMF forecasts negative growth.
Turkmenistan Country Profile
Turkmenistan has been able to sustain double-digit headline growth for many years and has a macro profile which compares favorably with others in the region and amongst other emerging or frontier economies. The country is, however, feeling the chilling effect of both lower gas and oil prices and the contagion from the 50% devaluation in the Russian ruble’s exchange rate. The value of gas export revenues are expected to fall by approximately 25% this year.
Mongolia Country Profile
Four years ago Mongolia’s economy grew at 17.3%, the world’s fastest. This year’s growth is expected to be little more than 1.0%. The reason for the collapse is the sharp drop in FDI from US$4.7 bln in 2011 to only US$230 mln last year. However, the removal of the Mongolian People’s Party from the grand coalition has allowed the government to resolve many of the disputes with the mining companies, which led to the drop in FDI, and to approve several large-scale projects.