gdp, $ billion and growth, - macro-advisory · 2020/4/21 · oil, cobid-19 and lower cross-border...

No warranties, promises, and/or representations of any kind, expressed or implied are given as to the nature, standard, accuracy, or likewise of the information provided in this material nor to the suitability or otherwise of the information to your particular circumstances. Macro-Advisory Limited does not accept any responsibility or liability for the accuracy, content, completeness, legality, or reliability of the content contained in this note. © Copyright Macro-Advisory Limited

Covid-19 – Eurasia Check-up Watchate

April 21st 2020

Covid-19 in Eurasia: First look at the macro

damage

This is a weekly update of the most important news and events in the

Eurasia Region with specific emphasis on the impact of the virus, and

any actions that governments take, on the economy and the business

environment. See our separate Covid-19 Russia Checkup report for

more detailed information and analysis concerning Russia’s response

and the economic impact in that economy.

Big jump in cases. The number of reported Covid-19 cases in the

Eurasia region more than doubled from 29,781 to 66,472 last

week. Turkmenistan and Tajikistan are still officially virus free but

there is now enough credible evidence to show the virus is

established in both states.

Deaths rising. The death rate also more than doubled, from 327

to 683. More than 400 of the deaths are in Russia with Ukraine

and Belarus next-most affected.

Extended lockdowns. Most governments have now extended the

lockdown restrictions until early or mid-May. Conditions for

easing will be reviewed later this month. The Muslim holy month

of Ramadan is now starting and that will present problems for

many governments as this is a month when people attend

Mosques several times daily and meet family in the evenings.

Turkmenistan bucks the trend. The exception to the tightening

restrictions continues to be Turkmenistan. The government has

allowed the national football league to restart, although few

people attended games in the opening weekend.

Currencies start to slip. Most of the currencies in the region

started to slip last week as the price of Brent crude started to

collapse and the Russian ruble fell 3.4%. Since the start of this

week, the oil price and the ruble have both fallen steeply and this

will bring all the other currencies down.

Uzbekistan devalues. The Central Bank in Tashkent devalued the

som after it cut its policy rate from 16% to 15%. The currency had

been one of the few to stay stable this year and that resulted in

a drop in competitiveness. The government also wants to boost

the Som value of remittances.

First run macro forecast changes. We have updated the macro

forecasts for all of the countries in the Eurasia region (see details

in this report and summaries in Appendix 2). All economies are

affected by either the drop in oil or the effects of the Covid-19

crisis, either externally or domestically.

Ukraine advances bank reforms to unlock IMF loan. The Rada

has simplified the process to progress the bank reform legislation

which some oligarchs are attempting to stall and change. This is

the critical piece of legislation required by the IMF as a condition

to release US$5-US$8 billion of new loans this year.

Covid-19 in EurasiaPopulation*

Mln Cases Deaths

Armenia 2.96 1,339 22

Azerbaijan 10.11 1,436 19Georgia 3.99 402 4Belarus 9.45 6,264 51Kazakhstan 18.72 1,949 19Kyrgyz Republic 6.49 590 7Mongolia 3.26 34 0Russia 145.92 47,121 405Tajikistan 9.48 N/A N/ATurkmenistan 6.00 N/A N/AUkraine 43.80 5710 151Uzbekistan 33.34 1627 5

Eurasia Total 293.52 66,472 683

Source: *Worldometers, **WHO at April 21st

Coronovirus**

Currency Movement vs US Dollar, YTD*Currency v US$* YTD, %

Armenia Dram 481.20 -0.5%

Azerbaijan Manat 1.70 0.4%Georgia Lari 3.16 -9.3%Belarus Ruble 2.45 -13.9%

Kazakhstan Tenge 430.61 -11.1%Kyrgyz Republic Som 79.56 -12.3%

Mongolia Togrog 2,771.02 -1.9%Russia Ruble 75.55 -18.3%

Tajikistan Somoni 10.25 -5.4%Turkmenistan Manat** 20.00 -5.0%

Ukraine Hryvnia 27.17 -12.4%Uzbekistan Som 10,113.9 -12.4%Brent, $ p/bbl 25.31 -61.7%Afghanistan Afgani 75.88 1.7%Iran Toman** 15,720 -15.7%

Source: Bloomberg, Macro-Advisory

* as at April 21st

** commercial or street rate

Benchmark Interest Rates, %Current, % AdJusted bbs, +/-

Armenia 5.25% Mar -25

Azerbaijan 7.25% Apri l no

Georgia 9.00% Apri l no Belarus 8.75% Feb -25

Kazakhstan 9.50% Apri l -250Kyrgyz Republic 5.00% Feb -75

Mongolia 9.00% Apri l -100

Russia 6.00% Mar no Tajikistan 12.75% Feb 50

Turkmenistan

Ukraine 10.00% Mar -100Uzbekistan 15.00% Apri l -100

Source: Central Banks, Macro-Advisory

* at April 21st

GDP, $ billion and Growth, %GDP 2020E

bln, $ 2020E 2021E

Armenia $13.0 1.0% 4.0%Azerbaijan $45.0 -2.0% 1.0%Georgia $50.4 -5.0% 1.2%Belarus $14.2 -2.0% 3.5%Kazakhstan $157.0 -2.0% 3.0%Kyrgyz Republic $9.4 0.5% 3.0%Mongolia $12.5 2.0% 4.0%Russia $1,568.0 -2.5% 2.0%Tajikistan $8.2 1.0% 3.5%Turkmenistan $50.0 2.0% 5.5%Ukraine $141.8 -4.0% 3.0%Uzbekistan $55.5 1.7% 5.0%

Total, average $2,125.0 -2.3% 2.3%

Source: Bloomberg, Macro-Advisory

GDP, % Change YoY

2

Covid-19 – Eurasia Check-up Watchars Update

Changing macro forecasts and expectations

We have made a first run at adjusting macro forecasts and expectations for the economies in the Eurasia

region. These changes are necessarily preliminary as there are many variables with such a large degree of

uncertainty. We will update the expectations and forecasts for each country as more information becomes

available and as we get evidence of trends in each country and are able to assess respective government policy

responses.

Growth

Oil, Cobid-19 and lower cross-border trade. All countries will see a big decline in growth this year and most

will experience a contraction. Belarus and Ukraine are expected to experience the deepest contractions as

they both have fragile macro structures and financial positions. Others, such as Uzbekistan, are expected to

see a big drop in the previously expected rate of growth but should still remain with a positive number this

year. That is because these are fast developing economies with a low reference base.

Hydrocarbon hit. Countries which are most exposed to the lower price of oil and gas are:

Azerbaijan

Kazakhstan

Russia

Turkmenistan

Remittances hit. Countries most exposed to reduced migrant worker remittances are:

Armenia

Kyrgyz Republic

Tajikistan

Ukraine

Uzbekistan

Revised GDP Forecasts, 2020-2021, % Change YoYActual Revised Forecasts Previous

2019 2020E 2021E 2020E

Armenia 7.6% 1.0% 4.0% 4.9%

Azerbaijan 2.3% -2.0% 1.0% 3.2%

Belarus 1.2% -5.0% 1.2% 0.9%

Georgia 5.1% -2.0% 3.5% 4.8%

Kazakhstan 4.5% -2.0% 3.0% 3.8%

Kyrgyz Republic 4.5% 0.5% 3.0% 4.0%

Mongolia 5.1% 2.0% 4.0% 4.5%

Russia 1.3% -2.5% 2.0% 2.0%

Tajikistan 7.5% 1.0% 3.5% 5.7%

Turkmenistan 6.3% 2.0% 5.5% 6.0%

Ukraine 3.2% -4.0% 3.0% 2.8%

Uzbekistan 5.6% 1.7% 5.0% 5.8%

Source: National Statistics Centers, Macro-Advisory Ltd estimates

3


Inflation

Weak currencies and higher budget spending. The combination of weaker currencies, which all states will

experience except for Azerbaijan as it has a dollar-pegged currency, and higher budget spending (in income

and business supports) will lead to an acceleration in inflation this year. Normally Central Banks would be

expected to respond to this trend with an increase in interest rates but none will take that course this year

because of the need to support fragile economies.

Budgets

Most will drop to deficit. The table below shows the estimate of how much the combination of lower tax

receipts and higher “support spending” will have on each country’s budget. These numbers will change

materially when the full extent of government programs and the trend in respective economies is clearer.

Revised Inflation (average) Forecasts, % Change YoYActual Revised Forecasts Previous

2019 2020E 2021E 2020E

Armenia 1.6% 2.5% 3.0% 3.0%

Azerbaijan 2.7% 3.5% 3.0% 2.5%

Belarus 5.0% 5.8% 5.6% 5.0%

Georgia 2.8% 5.0% 4.5% 2.9%

Kazakhstan 5.1% 6.0% 5.5% 4.6%

Kyrgyz Republic 1.1% 9.0% 7.0% 4.8%

Mongolia 7.3% 7.0% 8.0% 8.0%

Russia 4.5% 4.5% 4.7% 3.6%

Tajikistan 8.0% 10.0% 7.0% 6.0%

Turkmenistan 9.0% 12.5% 10.0% 8.0%

Ukraine 8.2% 7.5% 7.0% 5.5%

Uzbekistan 18.3% 16.0% 15.0% 12.8%


Revised Budget Results, % of GDPActual Revised Forecasts Previous

2019 2020E 2021E 2020E

Armenia -1.0% -4.0% -3.0% -2.5%

Azerbaijan -0.3% -4.5% -3.0% 5.0%

Belarus 1.5% -3.0% -2.5% 1.0%

Georgia -2.2% -4.0% -3.0% -2.0%

Kazakhstan -2.2% -5.0% -2.2% -2.0%

Kyrgyz Republic -0.6% -6.5% -4.5% -2.0%

Mongolia 1.4% 4.0% 4.5% -2.5%

Russia 1.8% -2.0% 0.2% 0.5%

Tajikistan -2.7% -5.0% -4.0% -3.0%

Turkmenistan -3.5% -3.0% -2.5% -2.4%

Ukraine -2.1% -5.0% -2.4% -2.4%

Uzbekis tan -1.5% -4.0% -3.0% -1.0%


4


Current account

All but Russia will see a deficit in 2020. The steep reduction in exports for most countries, especially those

reliant on hydrocarbons, minerals and metals, will be partly offset with a reduction in imports. But, with the

exception of Russia, all countries in the Eurasia Region are expected to see a deficit in their Current Account

this year.

Debt

Most will need to borrow more from IFIs. The reduction in trade receipts, the rise in budget spending and

lower tax revenue will lead to a rise in national debt in all countries in the region. The degree of the increase

will vary from “low”, such as for Russia, to “high” as in the case for Georgia, Mongolia, Ukraine and Uzbekistan.

Revised Current Account Balances, % of GDPActual Revised Forecasts Previous

2019 2020E 2021E 2020E

Armenia -8.9% -9.0% -7.5% -6.8%

Azerbaijan 8.5% -7.5% -4.5% 10.1%

Belarus -1.3% -4.5% -3.5% -2.2%

Georgia -5.0% -9.0% -8.0% -8.4%

Kazakhstan -2.0% -5.5% -4.0% -2.7%

Kyrgyz Republic -9.3% -14.0% -11.0% -9.5%

Mongolia -14.0% -15.5% -12.9% -13.5%

Russia 4.3% 1.0% 1.8% 3.1%

Tajikistan -4.0% -7.0% -4.5% -2.8%

Turkmenistan -2.6% -3.0% -3.6% -2.9%

Ukraine -1.0% -3.0% -3.5% -3.0%

Uzbekistan -4.2% -8.5% -6.0% -6.4%


Revised National Debt, % of GDPActual Revised Forecasts Previous

2019 2020E 2021E 2020E

Armenia 53.0% 57.0% 56.0% 54.0%

Azerbaijan 30.0% 32.1% 35.7% 47.0%

Belarus 59.0% 60.0% 61.5% 58.0%

Georgia 46.0% 56.0% 54.0% 44.0%

Kazakhstan 21.5% 25.0% 25.0% 20.0%

Kyrgyz Republic 56.0% 65.0% 65.0% 57.0%

Mongolia 74.0% 85.0% 86.0% 81.0%

Russia 15.0% 16.0% 16.0% 14.0%

Tajikistan 50.0% 55.0% 56.0% 54.0%

Turkmenistan 27.0% 29.0% 30.0% 27.0%

Ukraine 58.0% 61.0% 56.0% 57.0%

Uzbekistan 37.0% 42.0% 40.0% 38.0%


5


Armenia

Reported cases: 1,339 + 300 (week-on-week)

Reported deaths: 22 + 8 (week-on-week)

Dram-US$ exchange rate: 481.20 0.9% (WoW) 4.2% (MTD) -0.5% (YTD)

Government actions & regulations

Lockdown extended. Armenia’s government has extended the country’s coronavirus (Covid-19) pandemic

state of emergency and lockdown until May 14th. The emergency regime was declared on March 16th.

Substantial restrictions on people’s movements and business activities remain essential for slowing the spread

of the virus, the government said. However, on April 12th, Armenia reopened some sectors of its economy.

Food retailers, public utilities, farmers and banks are continuing to work through the lockdown as well as

mines, cargo companies and food-processing firms. Officials said the lockdown is having the desired effect on

slowing the spread of the Covid-19 outbreak.

Data tracking. The controversial use of mobile-phone data to track potential carriers of the virus is to be

continued under the emergency powers extension.

Hotels requisitioned. Under the extended emergency rule, officials are empowered to requisition hotels or

other private properties to accommodate people placed under quarantine.

News reporting restrictions mostly lifted. In another development, nearly all restrictions on coronavirus-

related news reporting have been lifted, with the warning that any detected significant circulation of “so-

called fake news” could mean the restrictions being re-imposed.

New aid programs. This week, the Armenian government began implementing its 13 assistance programs,

nine of which are targeted towards the population, and four towards businesses. The total budget for the

programs is US$306 million. Prime Minister Pashinyan also said that banks have given credit breaks to

individuals in the amount of AMD15 billion (US$30.6 million) and to legal entities for AMD35 billion (US$71.5

million).

Informal workers. Although the government’s programs appear to cover a wide range of people and entities

during the crisis period, there is concern that certain groups are being left out. Armenia’s “informal work

sector” employs an estimated 20 percent of the population, and there are increasing complaints that these

people are not receiving due benefits from the aid programs. Deputy Prime Minister Tigran Avinyan addressed

the matter this week and promised to negotiate with the State Revenue Committee. There are also complaints

that government utility provisions are not high enough to meet most people’s needs.

Armenia - Covid-19: New Cases (Bar - RHS) & Deaths (Line - LHS) April 21st

Source: World Health Organization

6


Aid from China. Armenia received two shipments of medical supplies from China, each of which contained

medical uniforms, medical masks, standard masks, thermometers, medical instruments, and biochemical

products for the preparation of Covid-19 tests. Following the first shipment, the Turkish government reacted

strongly to the boxes themselves, which bore the words “May our friendship be higher than mountain Ararat

and longer than the Yangtze river.” The Turkish government reprimanded China for the writing, and the

Chinese ambassador to Turkey said that the blame lay with a private company and was out of the hands of

the Chinese government. Armenians consider Mount Ararat part of their historical territory, but it currently

lies within the borders of Turkey.

Education. Armenia instituted a distance learning program for its schools during the period that they are

closed. Although the Ministry of Education states that the distance learning is utilized by 80% of the country’s

schoolchildren, there are reports that a number of regions are under-equipped for it. In some parts of the

country, children are being forced to take lessons using landline phones.

Medical students. In order to fulfil staffing needs at medical institutions, the Armenian parliament passed an

amendment to current legislation allowing medical students currently undergoing their residency programs

to treat patients infected with Covid-19 once they undergo specialized training. The Ministry of the Diaspora

has been holding webinars in which Armenian medical professionals from around the world provide advice to

local doctors in Armenia.

No news from military. The Armenian armed forces have declared that they will no longer disclose the number

of infected soldiers or soldiers in self-isolation.

Nagorno-Karabakh. Former prime minister of Nagorno-Karabakh, Arayik (Ara) Harutyunian, won a runoff

presidential election in the disputed territory, de facto election officials said on April 15th. The result became

entirely expected after his rival asked his supporters not to vote in the second round run-off contest. Officials

said Harutyunian, a wealthy businessman, received 88% of the vote, compared with 12% for Masis Mayilian.

Monetary response and impact

New governor of Central Bank. Martin Galstyan has been elected the governor of the Central Bank of Armenia

in a secret ballot held Friday in the Parliament. Galstyan’s candidacy was proposed by the ruling My Step bloc.

And 104 MPs voted for him, while 15 were opposed. Galstyan’s candidacy was not supported by the deputies

from the Bright Armenia party.

Armenia Dram - US Dollar Exchange Rate

Source: Trading Economics

7


Azerbaijan


Reported Deaths: 19 + 7 (week-on-week)

Manat-US$ exchange rate: 1.695 0.4% (WoW) 0.4% (MTD) 0.4% (YTD)


Azerbaijan has announced it is extending coronavirus restrictions by two weeks until May 4th.

Baku also announced on April 18th that borders with Georgia and Iran will remain closed until May 4th.

Human Rights Watch (HRW) has accused Baku of "abusing" coronavirus restrictions to arrest government

critics. It said that in less than a month at least six opposition activists and a pro-opposition journalist were

sentenced to detention of up to 30 days on "spurious charges" that included breaking lockdown rules or

disobeying police orders. Most of them had criticized conditions in government-run quarantine centers or

authorities’ failure to provide adequate compensation to people struggling financially from the consequences

of the pandemic, it added.

The government has put in place a series of social-distancing measures to combat the outbreak, including a

ban on gatherings of more than ten people. Last month, parliament passed legal amendments providing for

fines of up to AZN200 (US$120) or detention of up to 30 days for violating the lockdown regime. In March,

154 people were jailed and thousands were fined for violating the restrictions, according to the Interior

Ministry. Critics of Azerbaijani President Ilham Aliyev say authorities frequently seek to silence dissent by

jailing opposition activists, reporters, human rights defenders, and civil society advocates without grounds.

President Aliyev re-evaluated the total social assistance amount to be allocated to the population at AZN3.5

billion. It was initially estimated at AZN1 billion. There are questions about the government’s ability to fulfil

its promises.

The Center for Public Health and Reforms of the Ministry of Health of Azerbaijan has created a web-based

program to help people determine whether or not they might be infected. The program was created with the

assistance of the UNDP.

For several weeks, almost 300 Azerbaijani citizens have been stranded at the Daghestani border. The border

is not due to open until April 20th, and the closure might continue even after this time. Local authorities said

that the people have been living in a mosque and a hotel and have been provided with basic necessities. A

local newspaper reported that they went on a hunger strike on April 9th.

Azerbaijan - Covid-19: New Cases (Bar - RHS) & Deaths (Line - LHS) April 21st


8


On April 17th, the government announced that the country had seen two consecutive days of recoveries

exceeding infections for the first time. Close to 100,000 tests have been conducted since the crisis began.

The Iranian government denied claims that it had sent humanitarian aid to the disputed region of Nagorno-

Karabakh. Following the release of a video in which Iranian fuel trucks appeared to be seen in the territory,

the Azerbaijani government demanded an explanation from Iran. The Iranian Foreign Ministry responded that

the claims were “utterly false” and that the story was fabricated by people hoping to raise tensions between

the two countries. Nonetheless, Azerbaijan was not satisfied with the response, and one website published a

list of Iranian transgressions with regard to NK since the war between Armenia and Azerbaijan in the 1990s.


Fitch Rating has revised its outlook on the Mortgage and Credit Guarantee Fund of the Republic of Azerbaijan's

long-term foreign- and local-currency issuer default ratings (IDRs) to negative from stable and affirmed the

IDRs at 'BB+'. The rating actions follow the revision of Azerbaijan's outlook to negative from stable,

underpinned by the expected negative impact of the combined shock from the slump in oil prices and the

coronavirus (Covid-19) pandemic on Azerbaijan's economy.

Economy & trade

Azerbaijan’s GDP grew 1.1% in the first quarter of 2020, Interfax news agency said on April 14th, citing

President Ilham Aliyev. The country’s Q1 inflation stood at 3%, it added, again quoting Aliyev. RIA news agency,

meanwhile, quoted Aliyev as saying that Azerbaijan would lose about US$1.0 billion if global crude prices did

not stabilize after an OPEC+ deal on cutting oil output.

Chevron has closed the sale of its stake in the Azeri-Chirag-Gunashli (ACG) fields in Azerbaijan to Hungary’s

MOL, fetching US$1.57 billion. The sale covers Chevron’s 9.57% interest in the BP-operated Caspian Sea

project, which accounts for over 70% of Azerbaijan’s oil output, as well as in the Western Export Route pipeline

that delivers its supplies to the Black Sea. It also includes the company’s 8.9% stake in the Baku-Tbilisi-Ceyhan

(BTC) pipeline that pumps ACG’s oil to the Mediterranean shore.

The State Oil Fund of Azerbaijan (SOFAZ) said on April 17th that its assets fell to US$41.35 billion by April 1st

from US$43.32 billion at the start of this year due to larger than anticipated transfers to the state. SOFAZ,

which serves as Azerbaijan’s sovereign wealth fund, sold currency on the market to help maintain stability in

the manat. It stated that transfers to the state budget in the first quarter totaled AZN4.613 billion (US$2.7

billion), AZN1.8 billion more than projected. “The fund sold US$2.771 billion on the market in the first quarter

to satisfy rising demand on the currency,” the fund said in a statement.

Azerbaijan Manat - US Dollar Exchange Rate


9


Belarus

Reported cases: 6,264 +3,335 (week-on-week)

Reported deaths: 51 22 (week-on-week)

Ruble-US$ exchange rate: 2.447 +0.4% (WoW) +5.6% (MTD) – 13.9% (YTD)


Belarus is considering two packages of measures to support the economy amid the pandemic, Belarus'

Economy Minister Alexander Chervyakov said as he met with representatives of business associations, BelTA

learned from the website of the Economy Ministry. The economy minister informed that the government has

sent the draft decree on the support of the economy in the face of the pandemic to the Presidential

Administration for consideration. The second level of measures was considered at the recent meeting of the

Presidium of the Council of Ministers. However, following the meetings with business, the Economy Ministry

sees the need for the third level of measures to stabilize the situation after the pandemic.

One of the topics of concern to business is electricity payments. Deputy Energy Minister Sergei Reentovich

explained that Belenergo company will issue a local legal act that will reduce the penalties to 0.002% of the

amount of customers' outstanding prepayment obligations for each calendar day of delay (the contracts

provided for a penalty of 1/365 of the refinancing rate, which is 0.024%). It is assumed that this measure can

be applied for three months (from 1st April to 30th June). At the suggestion of business associations,

representatives of the Finance Ministry, the Taxes and Duties Ministry and the National Bank will be invited

for the next meeting.

Belarus - Covid-19: New Cases (Bar - RHS) & Deaths (Line - LHS) April 21st


10



The Belarusian government mulls a new placement of Eurobonds for RUB30 billion (US$400 million) on the

Russian financial market if the cash-strapped nation fails to secure enough financial aid from multinational

donors. Belarusian Finance Minister Maksim Yermolovich said "We don't change plans to float Eurobonds, to

borrow RUB30 billion on the Russian financial market," the minister said, pointing out that the decision will

be made depending on what resources Belarus will be able to receive from international financial

organisations to satisfy the need to refinance the state debt within this year's state budget. "We may scrap

some plans to borrow money then [if donors provide enough support]."

Belarus is also seeking a US$1.0 billion loan from the European Bank for Reconstruction and Development

(EBRD) to support the economic sectors that have suffered most from the coronavirus (Covid-19) outbreak.

According to the media office of the Belarusian government, the matter was discussed this week between

Dmitry Krutoi, the nation's First Deputy PM, and Alain Pilloux, the EBRD's vice-president.

Belarus has asked the International Monetary Fund (IMF) for a US$900mn loan to cope with the impact of the

coronavirus (COVID-19) pandemic, Finance Minister Maksim Yermolovich said "The projected amount of funds

that we may receive this year is from US$500 million to US$900 million," he was quoted as saying by the BelTA

agency. The IMF is due to make a decision on disbursing the loan to Minsk by the end of April.

Economy & trade

The Belarusian economy grew by 0.3% year on year in January-March, the nation's statistics agency Belstat

reported.

The International Monetary Fund (IMF) forecasts a 6% year-on-year drop in Belarus' GDP in 2020 amid the

snowballing coronavirus (COVID-19) crisis, following 1.2% y/y growth in 2019. At the same time, the IMF

forecasts growth in the nation's GDP of 3.5% y/y in 2021.

Belarus Ruble - US Dollar Exchange Rate


https://pro.intellinews.com/belarus-seeks-1bn-ebrd-loan-amid-coronavirus-crisis-181184/?source=belarus

https://pro.intellinews.com/belarus-seeks-1bn-ebrd-loan-amid-coronavirus-crisis-181184/?source=belarus

11


Georgia

Reported cases: 402 + 120 (week-on-week)


Lari -US$ exchange rate: 3.158 - 0.6% (WoW) +4.1% (MTD) – 9.3% (YTD)


Prime Minister Gakharia announced the prolongation of the state of emergency until May 10th amidst

concerns about large-scale spread of the virus.

The Georgian National Center for Disease Control sent out a warning to the population that if they do not

obey the rules, the healthcare system will likely collapse, as has been seen in other countries. Amiran

Gamkrelidze, the head of the Center, said that cases could even reach 8,000 unless people remain vigilant

about following the rules.

On April 17th, private vehicle traffic was banned in the country until the end of the state of emergency.

On April 15th, entry to and from the four biggest cities in Georgia – Tbilisi, Batumi, Kutaisi, and Rustavi – was

blocked for at least ten days. Certain categories of people, including medical workers, diplomats, journalists,

and truck drivers, are exempt.

Georgia's government has decided to lockdown four of the main cities to control the spread of the coronavirus.

Prime Minister Giorgi Gakharia told reporters on April 14th that his cabinet decided to take the move for Tbilisi,

the capital, as well as for the cities of Rustavi, Batumi, and Kutaisi for 10 days as the country grapples with the

pandemic. "The government has decided to ban citizens from entering or leaving the cities starting at 9 pm

on April 15th," Gakharia said. According to Gakharia, his government will initiate a move to extend the state

of emergency that was announced in the country over the coronavirus for one month on March 21st.

The Georgian government has extended the ban on flights until May 10th. Only “government-coordinated

flights” are allowed that will bring back Georgian citizens from coronavirus-affected countries. So far, over

6,000 Georgian citizens have been brought home since the beginning of the outbreak.

Georgia has raised GEL130 milion for its StopCov fund. Several big donors, including former Prime Minister

Bidzina Ivanishvili, have made substantial donations.

This week, Georgia received US$600,000 worth of US aid to assist its healthcare system. In total, USAID has

allocated US$1.7 million to Georgia in its efforts to fight the virus. Georgia received 100,000 masks and 2,000

liters of hand sanitizing liquid from Germany, as well as disinfectant and medical equipment from Poland.

Georgia - Covid-19: New Cases (Bar - RHS) & Deaths (Line - LHS) April 21st


12


The rate of fines for daily violations of state of emergency rules is rising. In one day, police fined over 300

people for traffic violations, curfew violations, and neglecting to observe a two-meter distance apart.

The NGO community has complained that the two regions in Georgia that were closed down following

coronavirus outbreaks – Marneuli and Bolnisi – are ones populated primarily by ethnic Azerbaijanis. There

have been reports of discriminatory posts on social media against the Azerbaijani populations of these areas.

The villages of Kvermo Bolnisi, Savaneti, Balichi and Kazreti were also placed under strict quarantine this week.

The closing of the South Ossetian “border” has been condemned by the co-chairs of the Geneva International

Discussions from the European Union, United Nations and the OSCE. There are complaints that ethnic

Georgian residents of the disputed territory have been denied medical treatment for illnesses other than

Covid-19 because of the strict border control. Leaders of the disputed territory maintain that the measure

was necessary to contain spread of the coronavirus.


Georgia's state-owned Oil and Gas Corporation (GOGC) has postponed a planned eurobond issue due to

unfavorable market conditions amid the coronavirus crisis, a senior company official said. GOGC said in

November that it planned to issue Eurobonds worth €300 million on the London Stock Exchange in April.

"We have decided to move our plans and postpone the issue until a more favorable period," Omar Ogbaidze,

GOGC’s chief financial officer, told Reuters.

The European Union, International Monetary Fund (IMF), Asian Development Bank (ADB), European Bank for

Reconstruction and Development (EBRD), European Investment Bank (EIB), German Development Fund and

French Development Agency will provide Georgia with US$1.5 billion in financing by the end of 2020,

according to Georgian Prime Minister Giorgi Gakharia. "Besides [this financing], the private sector is providing

another US$1.5 billion. The same donor organisations are ready to assist the private sector of Georgia if help

is needed. This enables us to start real work on a post [pandemic] crisis economic recovery plan together with

our economic team and our international donor organisations, according to the PM

Economy & Trade

Georgia’s GDP looks set to contract by 4% this year given the onset of the coronavirus health and economic

crisis before expanding by 3% in 2021, according to International Monetary Fund (IMF). The drop in tourism

activity, which is marked out as a main driver behind the anticipated economic slowdown, as well as smaller

wage remittances from Georgians abroad will result in the current account deficit widening to 10.1% of GDP

this year from 5.1% in 2019, the IMF added. The gap would then narrow to 6.8% of GDP in 2021 under the

Fund’s scenario. The country has only just consolidated a downward trend towards smaller external deficits,

including via a moderate weakening of the Georgian lari. Thinner currency inflows are likely to re-ignite

pressures on the local currency.

Georgia Lari - US Dollar Exchange Rate


13


Kazakhstan



Tenge-US$ exchange rate: 430.61 - 1.1% (WoW) + 4.1% (MTD) – 11.1% (YTD)


On April 18th the government announced that it would no longer waive its requirement for visitors to get a

visa to visit the country if their stay is less than 72 hours. This suspension will be in place until November 1st.

This is not surprising given that the border is currently closed with no plans to reopen, but presumably the

government is looking forward to a time when some travel will be possible, and it wants to avoid the possibility

of the infection being re-introduced by overseas visitors.

President Tokayev has urged people of Kazakhstan to stay home as the peak of coronavirus infection has not

pass yet. “The number of Covid-19 infected people is growing in Kazakhstan, but not exponentially. This means

the made decisions were timely. But the peak has not been passed yet. I do ask citizens to observe

quarantine,” President Tokayev said on his Twitter. The President thanked medical professionals, police

officers, servicemen, volunteers for their work and emphasized importance of precautionary measures to

ensure their safety.

Deputy Health Minister Lyazat Aktayeva told reporters that experts are hoping that the epidemic is plateauing

in Kazakhstan. “We are reaching the peak stage of infections,” Aktayeva was quoted as saying “The level is at

seven per 100,000 people. We have in consideration of this begun a major screening process, particularly for

those engaged in providing essential needs to residential areas and who are risk of infection. There will be

active testing through to April 20th.”

The Kazakh government has issued a list of businesses that will gradually resume operations in Kazakhstan’s

locked down cities, the capital Nur-Sultan and largest city Almaty, the Kazakh prime minister’s website stated.

The list includes industrial enterprises; construction and road construction firms and large construction stores;

transport, warehousing, and agricultural service firms; car dealerships, service stations, car washes, tire

services, auto part stores, dry cleaners and office equipment repair shops; second-tier banks will also relaunch

operations but with only 50% of their staff on site; notaries by appointment; and catering facilities only with

take-away service.

Kazakhstan - Covid-19: New Cases (Bar - RHS) & Deaths (Line - LHS) April 21st


14


For Nur-Sultan, the list did not name industrial enterprises; companies in the construction and road

construction industries, large wholesale markets for building materials; and notaries by appointment.

The Kazakh government has paid out to over 2.7 million people compensation worth KZT42,500 (€91.44) per

person for lost income due to the ongoing coronavirus-related (Covid-19-related) lockdown, the Labour and

Social Protection Ministry said.

Kazakhstan’s foreign ministry summoned the Chinese ambassador to Nur-Sultan on April 14th to express a

protest over an article published in China which claimed that the Central Asian nation was keen to become

part of China, the ministry said in a statement. The article entitled “Why Kazakhstan is eager to return to

China” was published on privately-owned Chinese website sohu.com. The ministry said the article “runs

counter to the spirit of permanent comprehensive strategic partnership” officially declared between the two

countries. The article retells the history of Kazakhstan, pointing out that many leaders of Kazakh tribes had

pledged allegiance to the Chinese emperor. The article also claims that Kazakhstan had historically been part

of China’s territory and states that Kazakhs “do not have too many complaints” about being repeatedly

invaded by China.


Economic actions and impact

Kazakhstan's short-term economic indicator, a narrower gauge of annual GDP growth, stood at 3.4% in March,

down from 5.3% in February, according to latest data published by the State Statistics Committee. The

indicator is based on the change recorded in output indices in six basic sectors: agriculture, industry,

construction, trade, transport and telecommunications. These sectors constitute 60% of Kazakh GDP.

Kazakhstan’s GDP grew by 2.7% y/y in January-March, the Kazakh prime minister’s website stated on April

14th, citing a government meeting. Growth stood at 4% in the same period last year. “In 1Q20, investments in

fixed assets increased by 5.1%. The country’s gold and foreign exchange reserves reached US$30 billion, and

assets of the National Fund amounted to US$57.5 billion,” the prime minister’s website said.

Industries that recorded an expansion in the first quarter included the mining industry (+5% y/y),

manufacturing (+8.8%) construction (+11.7%) and engineering (+30.4%). However, the financial sector and

insurance services only grew by 0.7% and the transport sector saw a 1.3% contraction due to the impact of

the countrywide lockdown caused by the coronavirus (Covid-19) pandemic.

Kazakh retail sales moved up by 0.8% y/y in January-March, reaching a value of KZT2,378.4 billion (€5.11

billion), according to latest data published by Kazakhstan's State Statistics Committee. The gain reflected a

recovery in household consumption driven by renewed economic growth, which registered at 4.5% in 2019,

but this may not last amid economic pressures created by the coronavirus (Covid-19) pandemic.

Kazakh Tenge - US Dollar Exchange Rate


15


Kyrgyz Republic

Reported cases: 590 +160 (week-on-week)


Som - US$ exchange rate: 79.56 + 2.8% (WoW) + 1.7% (MTD) - 12.3% (YTD)


Kyrgyzstan has requested that China grant it debt relief as it continues to tackle the effects of coronavirus.

President Jeenbekov's office said that he had asked his Chinese counterpart, Xi Jinping, during a phone call

to consider "easing and prolonging payments on Kyrgyzstan's external debt to China,” the agency reported.

The two governments agreed that Beijing would send medical supplies and specialists to help Bishkek deal

with the spread of the virus, but neither presidential office commented on the debt relief.

It is believed that Kyrgyzstan is in debt to China for US$1 billion of its total US$4 billion international debt,

used in recent years to fund massive infrastructure projects.

President Jeenbekov has signed an order to extend the state of emergency in several regions across the

country until April 30, AKI Press reported. Areas including Bishkek, Osh, Nookat and Kara-Suu districts of the

Osh region, Suzak and Jalalabad are included in the state of emergency.

Monetary response and IMF aid loan

Kyrgyz Republic - Covid-19: New Cases (Bar - RHS) & Deaths (Line - LHS) April 21st


Kyrgyz Som - US Dollar Exchange Rate


16


Mongolia Republic

Reported cases: 34 + 4 (week-on-week)


Togrog-US$ exchange rate: 2,771.02 - 0.1% (YoY) + 0.1% (MTD) -1.9% (YTD)


The latest list of coronavirus (economic aid packages from the World Bank has been announced on April 18th,

with Mongolia receiving two payments of US$26.9 million and US$2.2 million from the international lender.

Mongolia’s rate of infection has remained low compared to other regional countries —including China where

the disease originated. Despite its relative proximity, Mongolia has so far reported only a limited number of

cases of infection and five deaths.

Previously, the Mongolian parliament ratified a US$12 million loan from the International Development

Agency, on April 13th. That line of credit had originally been destined for clean air projects, with a 25-year

lifespan.

Meanwhile, the Ulaanbaatar government has not yet requested special funds from the IMF as part of its raft

of packages prepared in response to the outbreak funded by the Government Reserve Fund.

These measures include tax exemptions, loan extensions and special grants for businesses, rate relief and

credit guarantees to SMEs.

Mongolia’s Ministry of Labour and Social Welfare and the Ministry of Finance have jointly developed a plan to

provide MNT200,000 (US$71) per month to each employee of shut-down businesses because of coronavirus.

The regulation stipulates that employees of companies that have shut down due to Covid-19 will be paid

MNT200,000 per month for three months. However, it will not be provided to the self-employed. This is

because the self-employed do not pay unemployment insurance.”

The Mongolian government said it had also decided to increase the child allowance by MNT10,000 to

MNT30,000 over a three-month period.

Mongolia - Covid-19: New Cases (Bar - RHS) & Deaths (Line - LHS) April 21st


17


In the first three months this year, 5,200 people received unemployment benefits, an increase of 200 over the

same period last year.

In the first three months of last year, MNT9.0 billion (US$3.2 million) was paid in unemployment benefits, but

this year it has risen to MNT12 billion (US$4.3 million). This is due to the fact that the minimum wage has risen

from MNT320,000 to MNT420,000.


Economic impact

Gross industrial output reached MNT3.1tn (US$1.1 billion) in the first quarter of 2020 in Mongolia, showing a

decrease of MNT778.3 billion (19.9%) year on year, official figures on April 14 reveal. The downturn in

economic activity is not unexpected as the country continues to deal with the local and international aspects

of the coronavirus (COVID-19) pandemic and a decrease in purchases of raw materials from the mining

industry.

Specifically, the mining and quarrying sector saw overall output at MNT859.1 billion (29.8%) from the same

period in the previous year, while manufacturing output increased by MNT23.2 billion (3.3%). Further

electricity, thermal energy and water supply raised output by MNT57.6 billion (17.2%). Out of the mining and

quarrying gross output, 60.4% was derived from the mining of metal ores, 34.9% was from the mining of coal

and lignite, 3.5% was from the extraction of crude oil and 1.2% was from other mining and quarrying in the

first quarter of 2020.

Mongolia Togrog - US Dollar Exchange Rate


18


Tajikistan

Reported cases: N/A N/A (week-on-week)

Reported deaths: N/A N/A (week-on-week)

Somoni - US$ exchange rate: 10.25 - 0.2% (WoW) - 0.5% (MTD) -5.4% (YTD)


A spate of deaths in Tajikistan over the past few weeks is nurturing only more doubt around the insistence of

officials that coronavirus has made no inroads into the country. The first was the death of a 60-year-old man

in the northern Sughd region. Health officials informed the family of the deceased that he had been diagnosed

with pneumonia. This death might have gone mostly unnoticed if RFE/RL’s Tajik service, Radio Ozodi, had not

reported that the Jabbor Rasulov District hospital, where the man had undergone treatment, was placed

under quarantine after his passing. As the broadcaster also reported, the man had recently returned from a

wedding in nearby southern Kyrgyzstan, where the epidemic has taken a solid hold. Despite Kyrgyzstan already

representing a risk area at the time of his travels, which took place in the last third of March, the man was not

placed in preventative quarantine. There have been suspect incidents in other parts of the country.

The authorities have categorically denied that this death was linked to coronavirus, although there are

multiple grounds for uncertainty. There are no testing facilities for Covid-19 in northern Tajikistan. As of April

14th, the only two laboratories understood to have the capacity for performing polymerase chain reaction-

based tests are in Dushanbe.

Many of the Tajik migrant workers whose remittances account for a significant amount of Tajikistan’s cash

inflows have returned home over the past few months due to coronavirus driven recessions in the countries

where they normally work, the Tajik economy ministry said. “The numbers of returning migrant laborers rose

sharply in February and March 2020, including from Kazakhstan and Russia, which account for more than 90%

of migrants,” the ministry said. It did not provide any exact figures.

The European Union plans to allocate a sum of EUR48 million to Tajikistan to help it cope with the novel

coronavirus pandemic, Tajikistan’s Foreign Ministry said on Tuesday, following Minister Sirojiddin Muhriddin’s

meeting with the Head of the Delegation of the European Union to the Republic of Tajikistan, Ambassador

Marilyn Josefson.

Tajikistan Somoni - US Dollar Exchange Rate


19


The damage to the Tajik economy from the pandemic stands at US$650 million to date, the ministry said. The

government noted it was considering tax breaks for local small and medium sized businesses and tax reforms

to protect and create jobs. The ministry added that the drop in inflows was affecting the local currency, the

somoni, and budget revenues. During the first 11 months of 2019, Tajik labor immigrants working in Russia

sent home US$2.49 billion, up by 7% from the same period in 2018. Tajik remittances from Russia fell by 8%

y/y to US$2.3 billion in 2018, despite general Russian economic stabilization. In 2017, remittances recovered

from a decline to US$1.9 billion in 2016, which was caused by Russian economic difficulties.

Total remittances from labour migrants abroad account for over 75% of all incomes flowing to Tajikistan’s

population. Remittances also account for around a third of GDP in Tajikistan, making the country one of the

world's most remittance-dependent.

Kyrgyzstan and Tajikistan are the only countries among Central Asian nations receiving support from the IMF

as part of efforts to combat the spread of COVID-19. The IMF on March 26 approved a US$120.9 million

disbursement to Kyrgyzstan to help meet urgent balance of payment needs resulting from the COVID-

19 pandemic. The move marked the first IMF emergency loan worldwide to have been sent through since the

pandemic began, the Fund said. The outbreak of the pandemic weakened the macroeconomic outlook for

Kyrgyzstan and opened up a US$400 million balance of payments gap.

20


Turkmenistan

Reported cases: N/A N/A (week-on-week)

Reported deaths: N/A N/A (week-on-week)

Manat (Commercial) US$ FX rate: 20.0 +0.0 (WoW) +7.5% (MTD) - 5.0% (YTD)


Turkmenistan on April 19th joined the small handful of countries around the world to continue hosting sports

events amid the Covid-19 pandemic, as its domestic football season restarted. The country halted its eight-

team football league in March after three rounds as a precaution against the pandemic. The league restarted

at the weekend with stadiums open to fans. The competition attracts small numbers of spectators – Channel

News Asia reported that about 300 attended a top-of-the-table clash between reigning champions Altyn Asyr

and league leaders Kopetdag, in a 20,000-capacity stadium in capital city Ashgabat.

CNA also reported that, because football is a minor sport in the country, its main sports television channel

covered handball instead of Sunday’s Altyn Asyr v Kopetdag match.

On 16 April, 2020 the US Embassy in Turkmenistan disseminated a statement that Turkmenistan has not

officially acknowledged any cases of Covid-19 within its borders and may be disinclined to do so if cases were

confirmed. The report also highlights that Turkmenistan is currently taking temperature measurements at

various locations in the country including some shops and stores. The diplomatic mission has reiterated that

medical protocols in Turkmenistan are not consistent with US standards, and some travelers have been

required to undergo medical testing unrelated to Covid-19. For this reason the US Embassy recommends that

its citizens decline any medical procedures beyond routine, non-invasive medical examinations or

temperature checks.

The pro-governmental Turkmen media outlet “ORIENT” stated that the funding will not be allocated to

Turkmenistan (or Kazakhstan) as they have been defined as upper middle income countries and, consequently,

do not need any assistance. According to the World Bank classification, the countries with GDP of US$4,086 –

12,615 per capita fall under this category. Turkmenistan’s GDP per capita amounts to US$7,065.

Weddings, birthday parties, commemoration ceremonies and other family festivities have been banned in

Lebap velayat, Turkmenistan. It is likely that it is related to the fact that the first quarantine zone has been set

up in the administrative centre of the region and that all international flights have been redirected to

Turkmenabad. The opposition funded (and Vienna based) “Chronicles of Turkmenistan” reports that at least

seven people who had tested posted for coronavirus were being kept in the quarantine zone on the outskirts

of the city.

Turkmenistan Manat (Commercial Rate) -US Dollar Exchange Rate

Source: Chronicles of Turkmenistan

https://www.vsemirnyjbank.org/ru/news/press-release/2013/07/02/new-country-classification

https://www.worldbank.org/en/country/turkmenistan/overview

21


Ukraine

Reported cases: 5,710 + 2,338 (week-on-week)

Reported deaths: 151 + 53 (week-on- week)

Hryvnia-USUS$ exchange rate: 27.17 - 0.5% (WoW) + 1.6% (MTD) - 12.4% (YTD)


The Ukrainian government has temporarily closed another ten checkpoints on the borders with Poland, Romania, and Moldova. The government took this decision at a meeting on April 15th. "We close another ten border checkpoints to minimize traffic. The flow of our citizens has already significantly decreased. These checkpoints can be closed during quarantine measures," news agency Interfax quoted PM Shmyhal as saying.

President Zelenskiy has signed into law a bill on amendments to the national budget for 2020. The new law sets up a UAH64.7 billion (US$2.4 billion) fund to counter the Covid-19 outbreak. The money will be used in top priority areas of the effort to counter its spread.

An extra UAH15.8 billion (US$578 million) will be allocated for extra payments to medical workers involved in fight against the pandemic. In all, healthcare spending has been increased by UAH16.4 billion (US$600 million). "To support the most vulnerable social groups during the coronavirus epidemic, the document provides for UAH10.6 billion (US$388mn) for one-off payments in addition to pensions. Funding for the Social Policy Ministry has been increased by UAH19.5 billion (US$714mn)," reads the statement.

UAH3 billion (US$110 million) has been sent to the reserve fund for measures in unforeseen circumstances.

The spending on road construction and repairs remained unchanged, thus the implementation of the Big Construction program aimed at improving infrastructure and creating new jobs in Ukraine will continue. Almost UAH70 billion (US$2.6 billion) has been allocated for road construction this year.

"The amendments to the national budget do not provide for cutting the costs related to national defence and security and support for agriculture," the president's press service said.

As many as 30% of Ukrainian bricks and mortar stores could shut down permanently by the time lockdown measures are lifted and the country's economy is restarted, nv.ua reported on April 16, quoting a study by realtor Colliers International.

The government has reinstated the state regulation of prices of social products, medicines and medical goods, according to the head of the National Economic Development Council (NEDC). Monitoring is being conducted for ten products, eight medicines and two medical goods. If their prices are planned to be increased, commercial establishments will have to inform the State Service on Food Safety and Consumer Protection about this.” The state regulation will cover buckwheat, sugar, top-grade wheat flour, pasta produced domestically, 2.5% milk in film package, mixed rye-wheat bread, chicken eggs of first category, chicken carcasses, 72.5% butter and still mineral water. The government will also regulate prices of medical masks and gloves as personal protective equipment during the coronavirus (Covid-19) pandemic.

Ukraine - Covid-19: New Cases (Bar - RHS) & Deaths (Line - LHS) April 21st


22



Ukraine's parliament adopted a set of amendments to its regulations with the aim of greenlighting, in final

readings, a bill that includes restricting the return of failed banks to their former shareholders. The bill was

backed by 242 MPs, while the necessary minimum is 226 votes. The amendments allows the Rada to adopt

any law under simplified procedure if MPs have filed record-high number of amendments to such a document,

as happened with the banking bill, to which MPS have filed about 16,335 amendments.

The bill’s approval, which will make it impossible to return the nation's largest lender PrivatBank, nationalized

in late 2016, to its former owners, oligarchs Ihor Kolomoisky and Gennadiy Bogolyubov, is a key precondition

for the International Monetary Fund (IMF) to initiate its loan program for Ukraine, estimated at about US$8

billion.

On April 14th, the nation's parliament greenlit another IMF-demanded document - the updated 2020 state

budget with UAH298 billion (US$11 billion) in a budget gap (an increase of 3-fold compared to the existing

budget plan), which will be covered by UAH297 billion in net borrowings (up 3.6-fold compared to the existing

plan). Of the total net borrowings, UAH135 billion (up 9.8-fold) are external and UAH161 billion (up 2.3-fold)

are internal.

Only 32% of respondents believe that it is better now for Ukraine to co-operate with the International

Monetary Fund (IMF) and receive new loans, while 46% hold another opinion and said that it is now better

not to co-operate with IMF, and not to receive new loans, according to a survey conducted by Kyiv

International Institute of Sociology (KIIS).

Economic impact

Ukraine’s economy will contract by 4.2% this year and then see an L-shaped recovery, but will see growth of

2.4% in 2021 according to the government. Ukraine’s economy will contract by 4.2% this year and then see an

L-shaped recovery, down from the October forecast of 3.2% growth in 2020, according to Ministry of Economic

Development, Trade and Agriculture estimates. According to the report, in 2021 the Ukrainian economy will

return to growth in 2021, when it will grow by 2.4%, the ministry said. According to the consensus forecast,

unemployment in Ukraine in 2020 will reach 9.4%, and in 2021 some 9.1%, the ministry said, reported Interfax.

The consensus forecast was prepared on the basis of updated assessments by experts from the Ministry of

Economy, the Ministry of Finance, the National Bank (NBU), as well as more than a dozen state and non-

governmental organisations and companies.

Ukraine Hyrvnia-US Dollar Exchange Rate


23


Uzbekistan



Som-US$ exchange rate: 10,113.9 - 3.8% (WoW) - 5.6% (MTD) - 5.7% (YTD)


The government said on April 20th that the restrictions imposed on the Central Asian nation against the spread

of the coronavirus (Covid-19) will be prolonged until May 10th. Uzbekistan has locked down multiple major

cities and provinces to curb the spread of the pandemic.

President Mirziyoyev on April 17th, endorsed the construction of a new pharmaceutical cluster, the Tashkent

Pharma Park, set to be located in Tashkent Region, the president’s press service said. The cluster will focus on

producing “innovative drugs” and “high quality medical goods and equipment” along with training medical

personnel, the statement said. The cluster will take up 79 hectares of land in Tashkent Region’s Zangiata

District and will be developed via 14 investment projects. It is set to employ 1,700 people, the statement

noted. The government was planning for foreign clinics and medical centers to open up branches in the cluster

in the future, it added.

The Cotton Campaign coalition of human rights groups has said it would be premature to lift a longstanding

global boycott of Uzbek cotton and textiles as called for by Tashkent. The government of Uzbekistan requested

the move to help the country deal with the economic impact of the coronavirus (Covid-19) pandemic.

Uzbek officials this week also cited their progress in eliminating forced labour from cotton harvesting in asking

for the embargo, introduced in 2006, to be ended. In an open letter to the Cotton Campaign, Uzbekistan said

it is facing an “unprecedented dual threat” to both its economy and public health caused by the spread of the

coronavirus. The “pivotal” ending of the boycott, subscribed to by 260 apparel manufacturers and retailers

around the world, could double Uzbek textile exports to Western markets and create much-needed jobs, he

noted. Officials in Tashkent have also estimated that ending the boycott could open the way to an extra US$1

billion in earnings for Uzbekistan from sales this year of cotton and textiles on Western markets.

But the Cotton Campaign said in an April 16 statement that only the complete eradication of forced labour

along with civil society reforms such as registering NGOs that monitor worker rights would spur it to lift the

boycott. “The issue is less whether to end the Pledge—but when and how—and above all, how ending it can

become a catalyst for responsible sourcing and investment in a reforming Uzbekistan.

Uzbekistan - Covid-19: New Cases (Bar - RHS) & Deaths (Line - LHS) April 21st


24



The central bank devalued the currency by 4.4% from its previous exchange rate. The move marked the

regulator’s second devaluation of the national currency against the US dollar and the euro within three days.

The bank said the rate for the euro would stand at UZS11,112, bringing in a 5% devaluation from the previous

rate.

Uzbekistan’s central bank cut its policy rate to 15% from 16% in a surprise move on April 14th. It attributing its

decision to external uncertainty caused by the coronavirus epidemic and the expected effects of Uzbekistan’s

price liberalization for a number of goods and services. It said disruptions in the supply of goods from China

could temporarily accelerate inflation. Inflation may also rise from the government's plan to gradually increase

utility prices in the country.

Uzbekistan’s economy partly relies on remittances from Uzbek migrant workers in Russia, a major oil exporter,

alongside some gas export revenues. The Central Asian nation is not as exposed to weak hydrocarbon prices

as neighbouring Kazakhstan, however. As such, the devaluation of the sum cannot be entirely attributed to

weak world energy prices, though another indirect effect may have come from the weakening Russian ruble

and Kazakh tenge. Russia and Kazakhstan stand among the country’s main trade partners. The central bank

said earlier that remittance to the country dropped by 23% in March.

The central bank has granted a banking licence to LSE-listed TBC Bank Group, one of Georgia’s two major bank

groups,. TBC has previously said that it obtained a preliminary Uzbekistan banking licence with the aim of

obtaining a final licence and starting banking operations in Uzbekistan by the summer. In December, TBC

launched trial point-of-sale consumer financing operations in the Central Asian nation, with the financing of

consumer products primarily in the electronics and furniture markets the main objective. In parallel, the

lender is actively developing its payments business in the country, through a recently acquired subsidiary,

Payme, the leading payments company in Uzbekistan, which already serves around 1.8mn customers.

Economic impact

Uzbekistan’s economy expanded by 4.1%-4.4% y/y in the first quarter of 2020, Minister of Economic

Development has said. The slowdown appears to have taken place despite quarantine measures against the

(coronavirus) COVID-19 pandemic being instituted after the first quarter ended. The deceleration in growth

was likely partly influenced by the global downturn that started earlier in the year. The pandemic is expected

to substantially weaken the Central Asian nation’s growth in 2020.

Uzbekistan Som-US Dollar Exchange Rate


25


Appendix 1: Benchmark & Policy Interest Rates

Armenia - Benchmark Interest Rate, % Azerbaijan - Benchmark Interest Rate, % Belarus - Benchmark Interest Rate, %

Source: Central Bank of Armenia Source: Central Bank of Azerbaijan Source: National Bank of Belarus

Georgia - Benchmark Interest Rate, % Kazakhstan - Benchmark Interest Rate, % Kyrgyz Republic - Benchmark Interest Rate, %

Source: National Bank of Georgia Source: National Bank of Kazakhstan Source: National Bank of Kyrgyz Republic

Mongolia - Benchmark Interest Rate, % Russia - Benchmark Interest Rate, % Tajikistan - Benchmark Interest Rate, %

Source: Mongolbank Source: Central Bank of Russia Source: World Health Organisation

Turkmenistan - Benchmark Interest Rate, % Ukraine - Benchmark Interest Rate, % Uzbekistan - Benchmark Interest Rate, %

No Information - approx 2.1%

Source: National Bank of Ukraine Source: National Bank of Ukraine Source: Central Bank of Uzbekistan

26


Appendix 2: Monetary & Fiscal Indicators & Forecasts

The forecasts for 2020-21 will change as the impact of the virus, and any government actions, becomes better

understood. Please check separate country reports for more detailed information and updates,

Growth IndicatorsPopulation GDP, $bln GDP/Cap US$GDP p/Cap US$ Upside, % GDP, % Change

mln 2020E 2020E PPP $ to PPP 2020E 2021E 2022E

Armenia 3.0 $13.0 $4,392 $9,178 109% 1.0% 4.0% 4.5%

Azerbai jan 10.1 $45.0 $4,447 $16,011 260% -2.0% 1.0% 2.0%

Belarus 9.5 $50.4 $5,333 $17,742 233% -5.0% 1.2% 1.5%

Georgia 4.0 $14.2 $3,559 $10,152 185% -2.0% 3.5% 4.0%

Kazakhstan 18.7 $157.0 $8,382 $24,738 195% -2.0% 3.0% 4.0%

Kyrgyz Republ ic 6.5 $9.4 $1,446 $3,447 138% 0.5% 3.0% 4.5%

Mongol ia 3.3 $12.5 $3,823 $12,209 219% 2.0% 4.0% 4.5%

Russ ia 145.9 $1,568.0 $10,746 $27,147 153% -2.5% 2.0% 2.4%

Tajikis tan 9.5 $8.2 $867 $3,061 253% 1.0% 3.5% 4.5%

Turkmenistan 6.0 $50.0 $8,319 $17,129 106% 2.0% 5.5% 5.5%

Ukraine 43.8 $141.8 $3,239 $9,233 185% -4.0% 3.0% 3.5%

Uzbekis tan 33.4 $55.5 $1,663 $6,240 275% 1.7% 5.0% 5.5%

Source: Respective National Statistics Services, Worldometers, Macro-Advisory Ltd estimates

Monetary Indicators

2020E 2021E 2022E 2020E 2021E 2022E 2020E 2021E 2022E

Armenia 3.0% 3.3% 4.0% 5.3% 5.0% 5.0% 500 490 480

Azerbai jan 3.5% 3.0% 2.8% 7.3% 7.0% 6.8% 1.7 1.9 1.9

Belarus 6.0% 5.5% 5.0% 8.5% 8.5% 8.0% 2.40 2.30 2.25

Georgia 5.0% 4.0% 2.8% 9.0% 8.0% 7.0% 3.1 3.0 2.9

Kazakhstan 6.0% 5.5% 4.5% 9.00% 8.00% 7.50% 420 400 380

Kyrgyz Republ ic 9.0% 7.0% 5.0% 5.00% 5.00% 4.25% 80.0 77.0 73.0

Mongol ia 8.0% 7.0% 6.0% 9.0% 9.0% 8.0% 2,800 2,750 2,725

Russ ia 5.5% 4.8% 4.0% 6.00% 5.50% 5.25% 74.0 68.0 65.0

Tajikis tan 11.0% 8.0% 8.0% 12.8% 12.5% 11.5% 10.2 10.7 10.7

Turkmenistan 12.5% 11.0% 10.0% 2.4% 3.0% 4.0% 4.2 4.2 5.0

Ukraine 8.0% 6.0% 5.0% 10.0% 10.0% 9.0% 27.0 28.5 29.5

Uzbekis tan 16.5% 14.0% 12.0% 15.0% 14.5% 12.0% 10,300 10,600 11,000

Source: Respective National Statistics Services, Macro-Advisory Ltd estimates

Inflation, eop % YoY Policy Rate, eop % YoY FX Rate v US Dollar, eop

Government Finances Budget Balance, % GDP Public Debt, % GDP

2020E 2021E 2022E 2020E 2021E 2022E 2020E 2021E 2022E

Armenia -4.0% -3.0% -2.0% -9.0% -7.5% -7.0% 57% 56% 55%

Azerbai jan -4.5% -3.0% -2.0% -7.5% -4.5% -2.0% 32% 36% 36%

Belarus -3.0% -2.5% -2.2% -4.5% -3.5% -3.5% 60% 62% 62%

Georgia -4.0% -3.0% -2.0% -9.0% -8.0% -6.0% 56% 54% 54%

Kazakhstan -5.0% -2.2% -1.5% -5.5% -4.0% -2.5% 25% 26% 25%

Kyrgyz Republ ic -6.5% -4.5% -2.5% -14.0% -11.0% -9.5% 65% 65% 62%

Mongol ia -4.0% -4.5% -4.0% -15.5% -12.9% -10.3% 85% 86% 90%

Russ ia -2.0% -0.2% 0.2% 1.0% 1.8% 2.4% 15% 16% 16%

Tajikis tan -5.0% -4.0% -3.5% -7.0% -4.5% -4.0% 55% 56% 57%

Turkmenistan -3.0% -2.5% -2.5% -3.0% -3.6% -3.6% 28% 30% 33%

Ukraine -5.0% -2.4% -2.4% -3.0% -3.5% -3.0% 61% 55% 53%

Uzbekis tan -4.0% -3.0% -2.0% -8.5% -6.0% -5.0% 28% 25% 26%

Source: Respective National Statistics Services, Macro-Advisory Ltd estimates

CA Balance, % of GDP

27


Appendix 3: Russian government actions

Russian Government Measures To Restrict Covid-19

3-Feb Restriction on entry by Chinese citizens, except through Sheremetevo airport

20-Feb Ban on entry by Chinese citizens

26-Feb Control of arrivals from South Korea, China and Italy

1-Mar Ban on entry by Iranian and South Korean citizens

2-Mar Moscow schools cancel swimming and large scale events

5-Mar Cancellation of St Petersburg International Economic Forum (June)

6-Mar Self-isolation of arrivals from China, South Korea, Iran, France, Germany, Italy and Spain

11-Mar Moscow ban on events with more than 5000

Most flights to Italy, Germany, France and Spain suspended

13-Mar Ban on entry to Italian citizens and foreigners arriving from Italy

14-Mar Russia closes land border with Poland and Norway

Moscow school attendance optional

16-Mar Flights to Europe limited to Sheremetevo connections to major capital cities

Government announces economic stimulus package

Border with Belarus closed

Russia limits entry by all foreigners until 1 May (diplomats and similar excluded)

19-Mar All persons arriving in Russia to observe mandatory 14 day quarantine

First patient with Covid-19 dies

20-Mar Central Bank of Russia keeps interest rates unchanged

21-Mar Public and private medical facilities must register qualified personnel in a centralized database

Government meeting on measures to support the economy

Moscow government closes gyms and swimming pools

25-Mar President Putin visits Moscow's main isolation hospital at Kommunarka

26-Mar President Putin addresses nation

Government introduces legislation to the Duma that would empower it to announce an emergency

Government announces cessation of all international flights from March 27th

28-Mar Moscow announces closure of cafes, restaurants and non-essential shops

30-Mar Prime Minister Mishustin closes borders to all traffic

2-Apr Presidential address extending non-working period to end April

4-Apr Russia closes air connections with other countries

5-Apr Government bans the imposition of penalties for nonpayment of household utilities

9-Apr President's live TV address to governors

10-Apr Tightening of Moscow quarantine - non-essential businesses close, permit regime introduced

11-Apr From April 15th, QR codes required in Moscow and Moscow region for car journeys

15-Apr New QR regime introduced, creating bottlenecks initially, resolved after a day

President announces new packet of support for businesses

16-Apr President announces cancellation of May 9th parades

18-Apr President signs decree automatically extending visas and other permits to June 15th

19-Apr Easter services in empty churches, some illegal gatherings, some regions allow services

Source: Macro-Advisory, from Russian media sources

28


Appendix 4: Kazakhstan government actions

Appendix 5: Ukraine government actions

Kazakhstan Government Measures To Restrict COVID-19

12-Mar School holidays brought forward to March 16th

13-Mar First cases in Kazakhstan recorded

13-Mar President cancels Norouz holiday (March 22nd-23rd) and Victory Day (May 9th) celebrations

15-Mar Kazakhstan declares state of emergency - national quarantine

Entry ban for all foreigners except diplomats and official delegations

17-Mar Lockdown announced in Nur-sultan and Almaty - divided into sectors to reduce movement

Movement restrictions, non-food retailers close, restaurants delivery only

22-Mar Cessation of rail, air and road connections with Nur-sultan and Almaty

25-Mar Ban on export of nine food staple items

27-Mar Payment holiday on all loan payments from March 16th to June 15th

28-Mar Tougher quarantine in Nur-Sultan and Almaty

10-Apr President addresses government and nation, extends state of emergency to end April

12-Apr Non-working regime in Almaty extended to April 30th

18-Apr 72-hour visa-free regime suspended until November 1st

Source: Macro-Advisory, from media sources

Ukraine Government Measures To Restrict Covid-19

4-Feb Ukraine International Airlines stops flights to China20-Feb Ukraine nationals evacuated from China - quarantined in Poltava, sparking local protests2-Mar First patient identified, infected in Italy10-Mar Flights to European countries reduced12-Mar National quarantine for 3 weeks

Schools closedEvents with more than 200 people bannedAir connections with Italy closed

13-Mar Borders closedFirst death

16-Mar President addresses nation, closing bus, rail and air travel, and closes metroForeign nationals barred from entry for two weeks

17-Mar All air connections closedMajor cities close all retail outlets except pharmacies, food retail, gas stations, banksGovernment announces economic measures

3-Apr Measures to strengthen quarantine, lasting till April 24th8-Apr Government says quarantine likely to be extended17-Apr Kyiv Police say they will stop people entering churches18-Apr Zelensky says that quarantine measures may be relaxed after April 24thSource: Kiev Post, Macro-Advisory, from media sources

29


Appendix 6: Uzbekistan government actions

Uzbekistan Government Measures To Restrict COVID-19

21-Feb March investment summit cancelled

4-Mar Block on entry by citizens of 40 countries with coronavirus infections

15-Mar Bar on entry for all foreigners

All universities and schools closed for 3 weeks

16-Mar Suspends international air and road connections

All citizens arriving from abroad must observe 14 day quarantine

Spiritual Board of Muslims cancel Friday prayers

19-Mar President orders US$1 billion fund for Covid-19 fight, to be financed from abroad

22-Mar Tashkent shuts down all public transport, only disinfected taxis will operate

Government announces border closure

27-Mar First death from coronavirus

1-Apr Self-isolation regime imposed in Tashkent and other regional centers

18-Apr Quarantine extended to May 10th

Uzbekistan sends 5 million medical masks to Russia

20-Apr Private medical institutions allowed to carry out coronavirus tests

Source: Macro-Advisory, from media sources

30


Who are we?

Macro-Advisory is an independent Eurasia-based consultancy providing international

companies and investors with strategic advisory services throughout the CIS-Eurasia

region

Macro-Advisory’s coverage footprint includes the entire CIS-Eurasia region plus Mongolia

For our clients we carry out market and sectoral analysis, risk assessments, and deep due-

diligence work across all of the key industry sectors in all of the countries in the region

We keep our clients fully informed of the relevant trends and events which impacts their

business

We assist local business teams and management in headquarters to help ensure a strategic

focus and success for our clients’ businesses

We are experts on the Eurasian Economic Union (EaEU) and help our clients assess the

opportunities and implications of the economic bloc

We are experts in the operation of the Chinese promoted Belt & Road Initiative (BRI) and

in helping our clients understand the opportunities arising from this expanding trade and

transport network

Our Competitive Advantages

Local. From our base in Moscow we cover the entire CIS-Eurasia region. We have an

available network of industry specialists across the region to assist with project work as

required. We also have offices in London, Washington, and New York, from which we are

able to regularly engage with our clients.

Independent. We are independent and this allows us to offer completely impartial advice.

We combine coverage of economics, politics, industry and social trends to provide the

most comprehensive analysis for our clients.

Experienced. The combined experience of our key personnel living and working in the CIS-

Eurasia region is over 150 years.

Network. We have built a substantive network of contacts in government and regulatory

agencies as well as in other relevant bodies. This allows us to consult with decision makers

and policy influencers, and to gain better insights into evolving events.

Commercial. All of our reports come with commercially relevant and, more importantly,

actionable recommendations.

Reports. All of our clients get regular reports updating and providing analysis of economic

and industry data as well as an assessment of all relevant news and events which are

important for companies and investors in the region.

Briefings. We host regular client briefings, including quarterly events with specialist guest

speakers. We also organize formal presentations for clients, including at management and

board level.

31


Reports Suite* Russia Macro Monthly. This monthly update provides a record of all of the events which investors in Russia are interested in, such as economics, politics, monetary policy and all business related developments. This publication also has updated economic forecasts for Russia and all of the CIS-Eurasia states. We also provide reviews of all new books published which are focused on or which may influence the Eurasia region.

In Context. Whenever a topic arises which is both

topical and of concern to our clients, such as the

questions and threats posed by sanctions, we issue

quick response notes to place the topic into a proper

context. In these notes we highlight the areas of

concern and set out our opinion about what to expect

next and how to prepare for it.

Eurasia country reports. We issue regular updates for all of the countries in the CIS-Eurasia region. These will cover not only macro and political events but will also highlight business trends and focus on opportunities for investors, both existing and emerging. These reports also look at and explain any risks in respective investment scenarios.

Industry reports. The bulk of the work we undertake for our clients, for example, strategic industry analysis, is customized and is exclusive for the client. But, from time to time, we cover the general trends and focus on opportunities for investors in sectors which we believe have high growth potential. Over the past year we have issued reports covering agriculture, e-commerce, insurance, pharmaceuticals, construction, and many others.

Thematic reports. In this series of reports we look at interesting and emerging themes which have relevance across the CIS-Eurasia region and are not exclusive to one country. We issue regular updates on the development of the Eurasia Economic Union (EaEU), the expanding Belt & Road network and the investment opportunities arising from this, Caspian Corridor developments, and others.

Political briefings. For our clients we issue regular updates covering sensitive political issues in all of the countries of Eurasia. In these tightly controlled reports we are able to offer an un-biased and frank opinion about the events and set out the implications for businesses and investment risk.

*Refer to our web site (www.macro-advisory.com) for a full list of available reports

http://www.macro-advisory.com/

32


Contacts

Moscow: +7 495 139 4703

London: + 44 208 798 0742

Tokyo: +81 3 5219 1520

Washington: +1 914 494 3344

Email: [email protected]

Website: http://macro-advisory.com/

No warranties, promises, and/or representations of any kind, expressed or implied are given as to the nature, standard, accuracy, or likewise of the information provided in this material nor to the suitability or otherwise of the information to your particular circumstances. Macro-Advisory Limited does not accept any responsibility or liability for the accuracy, content, completeness, legality, or reliability of the content contained in this note.

© Copyright Macro-Advisory Limited 2020

gdp, $ billion and growth, - macro-advisory · 2020/4/21 · oil, cobid-19 and lower cross-border...

Documents