The International Monetary Fund (IMF) has last week released its World Economic Outlook report for April 2023. The fund lowered Turkey’s economic growth forecast for this year to 2.7% from 3%, increased by 0.5% Azerbaijan’s forecast to 3% and enhanced Armenia’s GDP forecast from previous 4.5% to 5.5%. An Armenia-registered company was included in the sanctions list of the U.S. Department of Commerce. Moreover, at a meeting with Armenian Deputy Prime Minister in Washington on April 11, the U.S. Treasury Department reminded Armenia of measures against circumvention of anti-Russian sanctions.
Below are the main economic and business developments in Georgia’s neighboring Turkey, Azerbaijan and Armenia during the week of April 9-15.
Turkey
The International Monetary Fund (IMF) lowered Turkey’s economic growth forecast for this year to 2.7% from 3%. In a meantime, the IMF raised its economic growth forecast for Turkey to 3.6% for next year. That is 0.6 percentage points higher than the previous projection of 3% made in January.
Turkish airports welcomed more than 38.9 million passengers, including transit passengers, in January-March. The three-month figure grew 31.5% from a year ago, the State Airports Authority General Directorate data showed. Some 18.8 million passengers took domestic flights from January to March, a 17.6% rise year-on-year. The number of passengers on international flights surged 48.3% to 20.2 million in the same period. Turkey's airports served 436,550 planes, including overflights, in the first quarter of 2023. Istanbul Airport welcomed more than 40% of total passenger traffic in the country with 16.5 million passengers, of which 3.6 million were on domestic routes and 12.9 million on international ones. The mega airport served a total of 113,845 airplanes in the three months to March. The second-busiest hub was Istanbul's Sabiha Gokcen Airport on the city's Anatolian side, which attracted 7.9 million air passengers. It was followed by Antalya Airport in the Turkish Mediterranean resort city, which saw 2.8 million passengers. On the flip side, cargo traffic in Turkey's airports fell 4.6% from the same period of last year to nearly 347,072 tons.
Turkey aims for record-breaking tourism revenue in 2023. The country’s ambition is to achieve a target of $60 billion (TL 1.16 trillion) in tourism revenues, its official says.
Turkish defense giant Aselsan begins to export anti-drone system IHTAR. The anti-drone system aims to neutralize mini and micro UAV threats in urban and rural environments. It allows the protection of critical facilities, prevention of illegal border leaks, and safety of densely packed events. Company signed export contracts with Northern Cyprus, Kyrgyzstan, Niger and Angola.
Turkey foresees $1.5B investment in renewable-based storage projects, Turkey's Energy Market Regulatory Authority (EPDK) says. Renewables accounted for more than 95% of new capacity increases in the country in 2021. The country achieved a record-high annual increase in wind energy in 2021 with the addition of approximately 1,750 MW, up from the previous all-time high of 1,248 MW added in 2016. Turkey is forecast to see around 64% growth in its renewable energy capacity to 90 gigawatts (GW) in the next five years, according to the International Energy Agency (IEA), with almost 75% of this addition being solar and wind. The growth will help it rank fourth in Europe and among the 10 biggest renewable markets in the world. Turkey ranks fifth in Europe and 12th in the world in renewable energy installed capacity, and seventh in Europe and 12th in the world when it comes to wind energy installed power.
Turkey aims to produce electricity from domestic wind turbines in 2 years. Turkish company Kalyon Holding says it aims to achieve 70% local elements in turbines and plans to establish factories in Istanbul, the capital Ankara and western Izmir province.
Turkey's retail sales volume, a marker of growing consumer spending, fell 6.5% month-on-month in February after powerful twin earthquakes hit numerous provinces and affected 13 million people. Automotive fuel sales posted the most significant decline of 8.8%, while non-food (except automotive fuel) dove 8.7% from a month ago in February. Food, drinks and tobacco sales inched down 0.3% during the same period. Electronic goods and furniture sales slipped the most among non-food items, down 11.1% every month this February.
The Turkish private sector's foreign debt totaled $158 billion as of February, down $1.4 billion from the end of 2022, the Central Bank of the Republic of Turkey (CBRT) said.
Last week, Turkey made 1st delivery of LNG to Bulgaria. Turkish Petroleum Pipeline Company (BOTAŞ) and its Bulgarian counterpart Bulgargaz began the first gas shipment from Turkey to Bulgaria under a 13-year agreement.
Egyptian Foreign Minister Sameh Shoukry will pay an official visit to Turkey on Thursday, April 18, Turkish Foreign Ministry announced. At the meetings during the visit, bilateral relations and regional developments will be discussed. Last month, Turkish FM Mevlut Cavusoglu and Shoukry met in the Egyptian capital Cairo. Cavusoglu is the first foreign minister to visit Egypt from Turkey in 11 years. Diplomatic relations between Turkey and Egypt are maintained at the level of charges d'affaires since Egypt's 2013 military coup, which overthrew late President Mohammed Morsi.
Armenia
The International Monetary Fund said in its latest World Economic Outlook report for April 2023 that it expects Armenia's economy to grow by 5.5% in 2023. The forecasted figure is up from IMF's previous projection of 4.5% growth for Armenia in 2023, made in December 2022. The April report notes that the growth of the Armenian economy will slow to 5% in 2024. IMF analysts also expect inflation in Armenia to be 7.1% in 2023 and decline to 5% in 2024.
An Armenia-registered company was included in the sanctions list of the U.S. Department of Commerce in addition to the sanctions of the U.S. Department of the Treasury. The company is called Tako LLC. It is blacklisted along with 27 other legal entities from Russia (10 companies), China (12), UAE (2), Uzbekistan (2), Syria, Turkey, Malta, Spain (one each).
U.S. Treasury Department reminded Armenia of measures against circumvention of anti-Russian sanctions. At a meeting with Armenian Deputy Prime Minister Mher Grigoryan in Washington on April 11, U.S. Deputy Treasury Secretary Adewale Adeyemo drew attention to measures taken by Washington to curb the circumvention of anti-Russian sanctions.
The Armenian government's goal is to bring the ratio of foreign direct investment (FDI) to GDP to 6% in 2026, Economy Minister Vahan Kerobyan said last week. He said in 2022, FDI in Armenia's economy reached $998.1 million, accounting for 5.12% of GDP. In 2021, the figure was $366.4 million, or about 2.5% of GDP.
Parliament of Armenia canceled VAT on imports of raw materials that are not produced in Armenia. "Given that the economic policy of the government is aimed at supporting local producers and increasing the efficiency of cash flow management by business entities, we plan to gradually shift taxation on imported raw materials and equipment from the border to the domestic economy," Deputy Minister of Economy Armen Arzumanyan said.
Azerbaijan
The International Monetary Fund forecasts 3% growth in the gross domestic product (GDP) of Azerbaijan, up 0.5 percentage points from October’s outlook. The Fund expects Azerbaijan’s economy to grow 2.6% next year and in 2028. The Azerbaijani government predicts the GDP to grow by 2.7% in 2023, and 4.1% in 2024.
In January-February 2023, the average monthly nominal wage of employees in Azerbaijan increased by 11.2% compared to the same period last year and amounted to 855 manats ($502.94). As of March 1, 2023, the number of hired workers in Azerbaijan's economy reached 1,715,800 people (+33,700 people or 2%), with 901,000 employed in the public sector and 814,800 in the private sector, the State Statistics Committee of Azerbaijan says.
In first quarter of this year, electricity production in Azerbaijan increased by 7,7% in comparison to the relevant period of the previous year and was 7756.2 mln kWh and exports increased to 1238.9 million kWh and imports to 31.3 million kWh.
GDP of Azerbaijan in January-February 2023 increased by 0.4 percent amounting to AZN30.3bn ($17.8bn).
During January-March 2023, the non-oil and gas export of Azerbaijan increased by 23.2 percent, amounting to $912.2m.
The volume of investments in Azerbaijan increased by 40.3 percent in January-March 2022, compared with the same period in 2022, amounting to AZN3.5bn ($2.1bn)
Azerbaijan said it spend about $3.8B on restoration of liberated territories. Over the past two years, about 6.5 billion manats ($3.823 billion) have been spent from Azerbaijan’s state budget to restore the territories liberated from occupation, Chairman of the Parliamentary Committee on Economic Policy, Industry and Entrepreneurship Tahir Mirkishili said.
Azerbaijan’s gas exports increased by 11.2% in January-March 2023, Energy Minister Parviz Shahbazov wrote on Twitter. “2.9 bcm of gas was exported to Europe, 2.7 bcm to Türkiye, and 0.9 bcm to Georgia. During this period, TANAP supplied Türkiye with 1.4 bcm of gas,” the minister tweeted.
According to operational data, oil-condensate production was 7.7 million tons, and exports were 6.4 million tons in the first quarter, Energy Minister Parviz Shahbazov wrote on Twitter. “During this period, 6.5 bcm out of the 12.2 bcm of gas produced with an increase of 3% was exported,” the minister tweeted.
