Foreign investments to Armenia in 2022 hit the record figure of $4.25 bln, which was 21.7% of the country's GDP, Economy Minister Vahan Kerobyan revealed last week. On May 9, Turkish President Recep Tayyip Erdoğan has announced a 45 percent increase in the wages of some 700,000 public servants, the latest in a series of such announcements before critical elections scheduled for May 14. In the months of January-March of this year, the average monthly nominal salary of hired workers in the economy of Azerbaijan increased by 11.4% compared to the same period last year and amounted to 901 manats ($530).
Here is a rundown of the latest economic developments around Georgia's neighboring Turkey, Azerbaijan and Armenia during the last week.
Turkey
Turkey's unemployment rate remained unchanged at 10% in March compared to the previous month. The number of jobless increased 4,000 from a month ago to 3.5 million as of March, the Turkish Statistical Institute (TurkStat) said. The unemployment rate was at 8.1% for men and 13.8% for women. The youth unemployment rate – age between 15 and 24 – was 20.7% during the same period, a rise of 0.8 percentage points. This was 15.2% for men and 28.9% for women. The labor force participation rate reached 53.6% in March. The employment rate was 48.2%, or 37 million people, as of March.
On May 9, Turkish President Recep Tayyip Erdoğan has announced a 45 percent increase in the wages of some 700,000 public servants, the latest in a series of such announcements before critical elections scheduled for May 14. Erdoğan announced at a meeting attended by Labor Minister Vedat Bilgin and representatives from some labor unions in Ankara on Tuesday that the minimum wage of a public servant would be TL 15,000 ($768) for the 2023-2024 period, which begins in July. The minimum wage in Turkey is currently TL 8,500 ($435). The president said his government would not let inflation take a toll on the lives of the people. Turkey’s working classes have been hit the hardest by an economic crisis that saw the annual rate of inflation reach 85 percent last year. More than 40 percent of the country’s workforce earns the lowest income allowed by law. Turkey’s official inflation slowed to 43.68 percent in April, according to official data.
Turkey's Istanbul Airport has been ranked the busiest in Europe with an average of 1,446 daily flights, the European Air Navigation Safety Organization (EUROCONTROL) said in its latest Air Traffic Operations Report covering the April 26-May 2 period. Istanbul Airport and Palma de Mallorca Airport, which serves Majorca, Spain's largest island, were the two airports that passed the 2019 levels among the top 10 in 2023. Istanbul Airport ranked first, increasing the number of daily flights by 21% compared to 2019 and 24% compared to 2022. Meanwhile, Turkish Airlines ranked third among the airlines with the most daily flights in Europe with 1,521.
Turkey’s current account deficit decreased to $4.5 billion in March, the country’s Central Bank said. The gap narrowed from $8.8 billion in February and $5.6 billion in March 2022, the bank’s data showed. The country’s gold- and energy-excluded current account posted a surplus of $1.4 billion in March. The goods deficit totaled $6.3 billion, while services saw a net surplus of $3.1 billion in the month. In January-March, the country’s current account balance registered a $23.6 billion deficit, growing from a $17.8 billion deficit in the same period last year.
In a move that was likely to change the outcome of Turkey’s presidential election in favor of the opposition candidate, Muharrem İnce, the leader of the Homeland Party, on Thursday, May 11, announced his withdrawal from the presidential race. “I’m withdrawing my candidacy,” the 59-year-old told reporters in televised remarks. “I am doing this for my country.” İnce’s withdrawal has increased the likelihood of an election victory for Kemal Kılıçdaroğlu, the main opposition Republican People’s Party (CHP) leader and presidential candidate of an opposition alliance of six parties. Kılıçdaroğlu is the main rival of President Recep Tayyip Erdoğan, who is seeking re-election. İnce, who cancelled several election rallies on Wednesday reportedly due to health problems, said he has faced tremendous pressure, a relentless defamation campaign and character assassination over the past 45 days, which caused him to make the decision to drop out. Claims about a secret deal İnce allegedly made with Erdoğan in return for his remaining in the presidential race to divide the opposition vote had been circulating since he announced his candidacy in March.
Turkey has delayed the payment of a $600 million (TL 11,431 million) natural gas bill to Russia until 2024, a report suggested on Wednesday, which marks the first such postponement under an agreement announced last week. Turkish Energy and Natural Resources Minister Fatih Dönmez said last week that Turkey and Russia agreed on a deal allowing Ankara to defer energy payments up to a certain amount, but did not give details. According to the agreement, up to $4 billion in energy payments to Russia may be postponed until next year, Reuters reported on Wednesday, citing two sources under condition of anonymity. Turkey depends heavily on energy imports, and Russia is its largest supplier. The latest agreement underlines the deepening relationship between Ankara and Moscow. The gas payments deal relieves Turkey's foreign reserves, which came under pressure due to rising energy prices worldwide after Russia invaded Ukraine last year. "Officially, a payment worth $600 million has been postponed to next year. The increase in energy prices had a huge impact on this," one of the sources with knowledge of the matter said. The source said Turkey could push back further such payments in the coming months depending on energy prices. Turkey's energy import bill hit nearly $100 billion last year. In the 12 months to February, the country imported 39% of its total 53.5 billion cubic meters (bcm) of natural gas from Russia.
Armenia
Foreign investments to Armenia in 2022 hit the record figure of $4.25 bln, which was 21.7% of the country's GDP, Economy Minister Vahan Kerobyan said. He also noted that the Armenian government had intended to bring investment ratio to GDP to 25%. According to the 2021 adjusted figures, the investment-to-GDP ratio was 23%.
Private money transfers sent to Armenia from abroad via banks in the first quarter of 2023 tripled from the first quarter of 2022 to about $1.6 bln, according to a Central Bank report. In January 2023 alone, private money transfers sent to Armenia from abroad upped to $386.1 million from $127.9 million in January 2022. In February they soared to $713.9 million from $180.1 million in February last year, while in March 2023 the money transfers grew to $482.4 million from $252.6 million in March 2022. Money transfers from the Russian Federation amounted to $1.2bmillion compared to about $239 million in the first quarter of 2022, an increase of more than 5 times. Money transfers from the United States to Armenia in January-March 2023 totaled $143.4 million, compared to $142.9 million in the first quarter of last year. Private money transfers from Armenia through the banking system exceeded $1 bln, up from $370.4 mln in the first quarter of last year.
Armenia's service sector surged by 22.9% in the first three months of 2023 as opposed to the same months of 2022 to 675.2 billion drams ($1.7 billion). In March 2023 alone the sector grew by almost 22% to about 248 billion drams ($644 million). Compared to the previous month the growth in March 2023 was 15.9%. According to National Statistical Committee, financial and insurance services accounted for 27.5 % of the total having grown by 18.5 % y-o-y to about 186 billion drams ($483 million). Information and communication services grew by 54.3% to about 143 billion drams or $372 million (21.2% of the total). Transport services grew by 34.2% to about 88 billion drams or $ 229 million (13% of the total). Entertainment, culture and recreation services grew by 2.6% to over 64 billion drams or $166 million (9.5% of the total). Catering and hotel services grew by 26.2% to over 63 billion drams or $163.7 million (9.4% of the total), while health and social services grew by 1% to 32.2 billion drams or $84 million (4.8% of the total). Scientific and technical services grew by 25.6% to over 28.5 billion drams or $74 million (4.2% of the total), real estate-related services fell by 5.8% to over 27.6 billion drams or $72 million (4.1% of the total), administrative and related services grew by 1.5% to about 19 billion drams or $49 million (2.8% of the total) and education services grew by 13.6% to over 18.1 drams or $47 million (2.7% of the total).
Armenia's domestic trade upped 21% in the first three months of 2023 from the same time span of 2022 to over 1 (one) trillion drams ($2.9 billion) in current prices, the National Statistical Committee (NSC) reported. It said in 2023 March alone the domestic tirade amounted to 385.4 billion drams ($1 billion), an increase of 26.1% compared to March last year, and a 18.2% growth compared to February this year.
More than 4 million tons of various goods were transported in Armenia in the first three months of 2023, a 9.6% rise compared to the same period of time in 2022, while the number of transported passenger surged by 30.7% to about 42 million. During the period under review, more than 2.5 million tons of cargo were transported by trucks, by 12.3% less than in January-March 2022. Some 767,400 tons were transported by rail transport (17.7% rise), some 677,900 tons were transported by trunk pipeline transport (6, 5% drop) and the cargo transported by air doubled to 7,400 tons. In the first 3 months of the year, about 33.4 million people were transported by road transport (32.4% growth), about 6.8 million by electric transport (18.3% growth), about 1.1 million by air (83.4% growth) and 112,000 by rail (15.1% growth). Also, 962 road accidents were reported in the first three months of the year, up 11.3% from the same period of time in 2022. Some 78 people were killed in these accidents, up 13% from the first 3 months of 2022 and another 1,395 were injured (up 9.1%). In the reporting period of 2023, revenues from postal and courier activities amounted to over 5.1 billion drams ($13.3 million), up 40% compared to the same period of 2022.
Armenia’s construction sector grew by 15.6% in the first three months of 2023 from the first three months of 2022 to a little over 64.8 billion drams (in current prices) or $168. 4 million. In March alone, the sector surged by 19% as opposed to March 2022 to 27.2 billion drams or $71 million.
The volume of goods produced in January-March 2022 by Armenia’s agriculture, forestry and fish farming sectors amounted to over 108.1 billion drams or $281 million in current prices, having increased by 0.8% compared to the same period of 2022.
Azerbaijan
In January-April of this year, the consumer price index in Azerbaijan was 113.5% compared to the same months of 2022. The consumer price index for food products, beverages, and tobacco products was 116.6%, for non-food products - 111.8%, and for paid services provided to the population - 110.7%. In April 2023, the consumer price index was 100.3% compared to the previous month.
Investment in fixed capital in Azerbaijan amounted to 4.580 billion manats ($2.69 billion) in January-April 2023, marking a 21.1% growth, the State Statistical Committee said. Over the past year, investments in the oil and gas sector increased by 25.8%, and in the non-oil-and-gas sector surged by 18.5%. During the reporting period, 2,620.2 million manats ($1.54 billion), or 57.2%, were made in production, 1,702.5 million manats ($1 billion), or 37.2%, in services, 257.3 million manats ($151.35 million), or 5.6%, in housing construction. Domestic funds constituted 3.344 billion manats ($1.97 billion) (73%) of the funds directed to fixed capital, and construction and installation work amounted to 3.252 million manats ($1.91 billion) (71%).
China bought wine worth $20 million from Azerbaijan. As part of the agreement on cooperation in the field of wine export from Azerbaijan to China, products worth $20 million were ordered last month, Economic and Commercial Adviser of the Chinese Embassy in Azerbaijan Ma Qi said. The trade turnover between Azerbaijan and China in 2022 amounted to $2.159 billion. This is 21.3% more than in 2021. More than 100 Chinese companies operate in Azerbaijan.
In 2023, Azerbaijan plans to export 12 billion cubic meters of gas to Europe, according to the International Energy Agency (IAE). IAE noted that during the past period of 2022 and 2023, gas supply from Azerbaijan through the Trans-Adriatic Pipeline (TAP) increased by 15 percent compared to the previous year and amounted to 8 billion cubic meters. Azerbaijan started supplying gas to Europe on December 31, 2020. A total of 22 billion cubic meters of gas has been transported through TAP, the European part of the Southern Gas Corridor, after the start of commercial operation. Further, Azerbaijan plans to double natural gas exports by 2027, according to the agreement on cooperation with the European Union, while the first steps are being made to start exporting green energy to European countries.
In January-April 2023, the value of Azerbaijan's total exports amounted to $12.6 billion, and the value of non-oil exports reached $1.2 billion. Exports in the non-oil sector increased by 21.2% compared to the same period last year. In particular, the export of alcoholic and non-alcoholic beverages increased 6 times. During the reporting period, the value of agricultural and agro-industrial exports increased by 9.1% to $248.2 million. The value created by agro-industrial products, which occupies a significant place in the structure of non-oil and gas exports, increased by 53.8% year-on-year to $74.7 million. In 2022, the value of Azerbaijan's non-oil exports increased by 12.3% compared to 2021 and amounted to $3.04 billion.
In the months of January-March of this year, the average monthly nominal salary of hired workers in the economy of Azerbaijan increased by 11.4% compared to the same period last year and amounted to 901 manats ($530). As of April 1, 2023, the number of hired workers in the country's economy reached 1,736,300 people (+33,500 people or 2%), with 904,100 employed in the public sector and 832,200 in the private sector. Among the hired workers, 19.3% occupied positions in education, 18.7% in trade, repair of transport vehicles, 12.9% in the industrial sector, 8.3% in medical and social services provided to the population, 6.8% in construction, 6.4% in state management and defense; social security, 4.2% in transport and storage, 3.6% in agriculture, forestry, and fishery, 3.6% in professional, scientific, and technical activity, 2.1% in finance and insurance, and 14.1% in other economic spheres.
In January-April 2023, the retail trade network sold 16.4 billion manats ($9.65 billion) worth of goods to consumers, including 9.5 billion manats ($5.59 billion) worth of food, beverage, and tobacco wares, 6.9 billion manats ($4.06 billion) worth of nonfoods. The retail trade in real expression rose by 2.9% compared to January-April 2022, including 2.1% on food, beverage, and tobacco wares and 4% on nonfoods.
In January-April 2023, Azerbaijan produced a gross domestic product worth 39,986.5 million manats ($23.52 billion), or 0.1% more than in the same period last year. Over the past year, value added decreased by 2.9% in the oil and gas sector of the economy while it increased by 3.1% in the non-oil and gas sector. The committee noted that 46.8% of GDP production came from industry, 8.9% from trade; vehicle repair, 5.5% from transport and warehousing, 2.8% from agriculture, forestry, and fishing, 4.6% from construction, 2.1% from tourist accommodation and public catering, 1.5% from information and communication sectors, and 17.6% from other sectors. Net taxes on products and imports made up 10.2% of GDP. Over the past year, GDP per capita in the country grew by 0.2% to 3,946 manats ($2,321).
Azerbaijan produced 10.2 million tons of oil (including condensate) in January-April 2023, the Ministry of Energy reported. Azeri-Chirag-Gunashli produced 6.2 million tons of total volume of oil production while Shah Deniz 1.5 million tons (condensate). SOCAR's oil output amounted to 2.5 million tons (including condensate).
The volume of Azerbaijan’s foreign trade turnover amounted to $12.3bn in January-March 2023.
Due to an increase in the volume of raw materials, Kazakhstan's national oil transporter KazTransOil increased the export volume of oil via Aktau Port to Baku (Azerbaijan) from 87,000 tons to 152,400 tons in April, or by 75% compared to March.
