Türkiye's electric automaker Togg has delivered a record number of vehicles in August. A whooping $10.9 billion net profit has been recorded by Turkish banks in the January-July period. Standard & Poor’s upgraded Armenia’s ranking to ‘BB-‘ from ‘B+’. Azerbaijan’s revenues from main gas pipelines increased by nearly 10%, while revenues from main oil pipelines decreased by 12.5%.
Here is a rundown of the latest economic, business and political developments around Georgia's neighboring Turkey, Armenia and Azerbaijan during the last week.
Turkey
Türkiye's domestically developed electric automaker, Togg has recently announced they have delivered 1,965 T10X vehicles during August alone, thus surpassing the total number of deliveries made during the three previous months, from May to July. "We said there is more than what you see. We broke a record by bringing 1,965 T10Xs to our users in August. Thus, we have exceeded the total number of deliveries for 3 months in one month since we started delivery in May," Togg said in a written statement. Mass production of the T10X was launched last October as the country's first electric vehicle was unveiled to the public.
Turkish banks recorded a whooping 293.4 billion Turkish liras ($10.9 billion) net profit ın the January-July period, according to data released by the country’s banking watchdog. Total assets in the Turkish banking sector reached 20 trillion liras ($743.5 billion) at the end of July, the Banking Regulation and Supervision Agency (BRSA) data showed. Loans, the largest sub-category of assets, amounted to 10.3 trillion liras ($384.4 billion) from January to July. On the liabilities side, deposits held at lenders in Türkiye – the largest liabilities item – totaled 12.5 trillion liras ($464.1 billion). The sector’s regulatory capital-to-risk-weighted-assets ratio – the higher the better – stood at 18.7% as of the end of last month. The ratio of non-performing loans to total cash loans – the lower the better – was 1.6%.
A Turkish defense firm, STM has agreed to export its unmanned surveillance and reconnaissance system to an African country for the second time, the company's general manager said. STM has sold its multi-rotor unmanned aerial system (UAS) for tactical surveillance and reconnaissance, named Togan, to Nigeria previously, and now agreed to export to another African country.
Türkiye's economy grew 3.8% year-on-year in the second quarter of 2023, better than the market forecast, according to data released by the country's statistical authority. The country's gross domestic product at current prices surged 60.7% from last year to 5.5 trillion Turkish liras ($271.5 billion) in the April-June period, the Turkish Statistical Institute (TurkStat) said. Economists had expected Türkiye's economy would grow 3.5% on an annual basis in the second quarter.
Global credit ratings agency Moody’s revised its forecast for Türkiye’s economic growth in 2023 and 2024, its latest outlook update report. The agency sees Türkiye’s gross domestic product (GDP) growing 4.2% this year, according to its Global Macro Outlook 2023-24 August report, up from its May forecast of 2.6%. The economy is expected to expand by 3% in 2024, an upward revision from Moody’s earlier forecast of 2%. The agency listed Türkiye among multiple nations where it says “economic activity in the first half of 2023 outpaced our expectations.”
Türkiye and the World Bank struck a $1 billion finance agreement Friday, aimed at facilitating the World Bank's support for the country's earthquake-devastated southeastern region. The Türkiye Earthquake Recovery and Reconstruction Project will help restore health services, rebuild damaged or destroyed municipal infrastructure, and repair and rebuild rural homes damaged or destroyed by the pair of earthquakes that rocked southeastern Türkiye early in February.
Türkiye's trade deficit grew 14.2% year-on-year to $12.2 billion in July. Turkish exports increased 8.3% from a year earlier to $20.1 billion in July, while imports soared 10.5% to $32.3 billion. Excluding energy products and non-monetary gold, Türkiye last month posted a foreign trade gap of $6 billion. The exports-to-imports coverage ratio fell to 62.2% this July compared to 63.4% in July 2022. Türkiye's outbound shipments to its main trading partner Germany totaled $1.67 billion in July, followed by Italy and the US, both with $1.1 billion, Iraq with $978 million and the UK with $962 million. China was the main source of Türkiye's imports in July with $4.6 billion, followed by Russia ($3.65 billion), Germany ($2.84 billion), Switzerland ($2.46 billion), and the US ($1.60 billion).
Türkiye's natural gas imports decreased by 39.2% in June compared to the same month in 2022, according to data from Türkiye's energy watchdog. Natural gas imports in June fell to around 2.33 billion cubic meters (bcm) from approximately 3.83 bcm in the same month of 2022, Türkiye's Energy Market Regulatory Authority (EMRA) said in its monthly natural gas market report. According to EMRA data, the country imported approximately 1.87 bcm of natural gas via pipelines in June, while 462 million cubic meters (mcm) were purchased as LNG. This represented a 42.9% decrease in pipeline imports and a 17.7% decline in LNG imports. Azerbaijan was the majority supplier, providing 743.6 million cubic meters (mcm) of natural gas to Türkiye, while Russia and Iran followed with 707.5 mcm and 419 mcm, respectively.
Armenia
Standard & Poor’s credit rating agency has upgraded Armenia’s ranking to ‘BB-‘ From ‘B+’ ‘ and affirmed its short-term foreign and local currency sovereign credit ratings at ‘B’. The outlook is stable. The stable outlook balances Armenia’s strong economic growth prospects and improved fiscal balance sheet against its moderately weak external position and elevated geopolitical risks. According to the agency, the upgrade reflects the improvements in Armenia’s GDP per capita and fiscal performance. The country’s close geographic, economic, and cultural ties with Russia have positioned it as one of the preferred destinations for Russian individuals and businesses seeking refuge from their home country’s economic and political stresses. As a result, migrant and capital inflows have propelled economic growth, with real GDP in Armenia increasing by 12.6% in 2022, and have narrowed Armenia’s persistent fiscal and current account deficits,” S&P says.
S&P Global Ratings expects Armenia's budget deficit to be 2.8% of GDP, significantly smaller that projected given strong growth this year. It recalls that the government targets a budget deficit of 3.1% of GDP in 2023, widening from an estimated 2.4% in 2022. The 2023 budget target encompasses an economic growth forecast of 7% in real terms.
The Armenian government on Thursday decided to facilitate conditions for economic entities to get the status of authorized economic operator. Authorized economic operator is a special status, given by the customs authority to a business entity, if it poses minimal risks in terms of customs violations. This status enables the business entity to use a number of simplified customs procedures. Gradually, the business entity becomes its own customs inspector, and relations with the customs authority are minimized. The government at this stage is ready to provide the following simplified procedures to business entities: Service without queues at checkpoints; Operators will not use temporary storage warehouses; they will be able to deliver goods to their own warehouse immediately from the checkpoints; "Green," "red" and "yellow" lanes procedures will not be applied to these entities; the customs authority will provide constant communication and consultation for these entities.
Ending months of speculation, Arayik Harutyunyan, Nagorno-Karabakh’s president, announced on Thursday, August 31 his decision to resign amid a deepening humanitarian crisis in Karabakh caused by Azerbaijan’s eight-month blockade of the Lachin corridor. In a written statement, Harutyunyan said the Armenian-populated region needs a new leadership in order to better cope with grave challenges facing it almost three years after the disastrous war with Azerbaijan. Harutyunyan has periodically fueled speculation about his impending resignation since Azerbaijan blocked last December traffic through the sole road connecting Karabakh to Armenia. In March, he helped to enact a constitutional amendment that empowered the local parliament to elect an interim president in case of his resignation. The latter would serve for the rest of Harutyunyan’s five-year term in office which was due to expire in May 2025.
Azerbaijan
In the first half of 2023, the volume of Azerbaijan's revenues obtained from transportation via gas pipelines made up AZN 1 261 251,7 thousand ($742 million), which is 9,5% more in annual comparison. In 2022, the mentioned indicator was AZN 1 151 546,2 thousand ($677 million). 52,5 % of gas transportation was carried out through the Baku-Tbilisi-Erzurum (South Caucasus) pipeline.
In the first half of this year, Azerbaijan's revenues from the main oil pipelines made up AZN 535 337,2 thousand ($315 mln), and this is 12,5% less in annual comparison, the State Statistics Committee said. This figure was AZN 612 054,3 thousand ($360 mln) in the relevant period of 2022. Note that in the in January-July of current year, 19 649,7 thousand tons of oil were transported through main oil pipelines, which is 10,7% more in annual comparison.
In January-July 2023, the volume of transactions carried out by foreign citizens using bank cards in Azerbaijan amounted to 1.2 billion manats ($0.71 billion), down 7.7% from the previous year. In July alone, the amount of transactions carried out by foreigners via bank cards amounted to 218.8 million manats ($128.7 million), 2.4% more than a year earlier.
In July 2023, Russia ($89.6 million) was the first in the list of countries that exported the biggest volume of goods related to the non-oil sector of Azerbaijan. Türkiye ($42.6 million) was ranked second, and Georgia ($18.4 million) was ranked third. In the list of non-oil exported goods in July, peaches ($23 million), propylene copolymers in primary forms ($12.5 million) were second, and gold ($11.5 million) was third.
In January-July this year, Azercosmos, under the Ministry of Digital Development and Transport of Azerbaijan, exported services worth $11.1 million to 45 countries. Compared to the same period last year, this is ten countries more and $4 million, or 26.5%, less than a year earlier. In July alone, Azercosmos exported services (satellite telecommunications and optical satellite) to 40 countries for $1.6 million.
