Armenia's economic activity in May 2023 was up 13.7% compared to May 2022. A certain decline has been recorded in inflation, which this past May dropped to 1.3%. Service exports of Turkey in the first four months of the current year amounted to $25.8 billion. The country eyes to surpass $120B toward year-end. Azerbaijan’s state oil company SOCAR has sold its stake in Shah Deniz and the South Caucasus Pipeline.
Here is a rundown of the latest economic and business developments around Georgia's neighboring Armenia, Turkey and Azerbaijan during the last week.
Armenia
Armenia's economic activity in May 2023 was up 13.7% compared to May 2022, Prime Minister Nikol Pashinyan said at a government meeting. According to him, industrial output in May 2023 was up 5.3% from May 2022, the construction sector grew by 18.4%, trade - by 28.6% and services -by 12.3%. "There is good news - we have a certain decline in inflation, which this past May dropped to 1.3%," he said. According to the National Statistical Committee, the country's economic activity in May 2023 was up 7.7% from April 2023. The economic activity in the first 5 months of 2023 was up 12.5% compared to January-May 2022.
Armenian Prime Minister Nikol Pashinyan reiterated his promise to raise the size of the minimum average pension to the size of minimum consumer and food baskets before 2026. The government of Armenia is raising pensions and allowances starting July 1. The minimum pension will rise from 31,600 drams ($82) to 36,000 drams ($94), while the average pension will increase from 46,100 drams ($120) to 49,700 drams ($129). The average amount of military pension will increase from 87,500 drams ($227) to 91,600 drams ($238). The minimum amount of pension will be worth 99.5% of the food basket which is estimated now at 36,180 drams ($94). The government is also raising disability allowances and for those families who lost their breadwinner. First category disabled persons' allowance will be raised to 39,000 drams ($101), the second and third category disabled persons' allowances will rise to 37,500 drams ($97) and 36,000 drams ($94) respectively.
Consumer prices in Armenia rose by 5.2% in January-May 2023 as compared to the first five months of 2022, according to numbers, released by the National Statistical Committee (NSC). At the same time, a decrease of 1.8% was registered in May of the reporting year as compared to April of the same year and a 1.3% increase as compared to May of the last year. According to the NSC, the prices of industrial goods in the first five months of 2023 were down 1.6% compared to the same period of 2022. At the same time in May this year, the prices of industrial goods were down 3.6% compared to May last year.
Armenia’s foreign trade in the first 5 months of 2023 soared by 86.9% year-on-year to over $7.3 billion. In May 2023 the foreign trade was up 2.3% from the previous month, while compared to May 2022 it was up 50.5%. Armenian exports in the first five months of 2023, compared to the same period of 2022, were up 93.3%, amounting to about $2.7 billion. In May 2023 compared to May last year, a 47.6% increase was recorded in exports. Armenian imports during the reporting period amounted to over $4.6 billion, registering an increase of 83.3% compared to January-May 2022. In May this year, imports rose by 52.1% from May 2022.
Armenia will receive a €6.5 million grant from the European Commission for implementation of Sustainable Energy, Energy Security and Climate Resilience in Rural Armenia technical assistance agreement.The proposal to sign this agreement was approved by the Armenian government on Thursday. The document will soon be submitted to the National Assembly for ratification. Energy efficiency and sustainable energy projects will be implemented in Tavush, Shirak, Gegharkunik and Syunik regions of Armenia. A number of buildings in rural areas will be furnished with energy efficient equipment, solar water heaters and photovoltaic installations. Thermal insulation of several buildings will also be carried out. The Armenian government is planning to increase the share of solar energy in the total volume of energy generation up to 15% by 2030. According to official statistical data, Armenia produced a little over 3 bln. kWh of electric energy during January-April 2023. Of that volume, solar power plants accounted for 4.2%, or 104.3 million kWh of electricity, an increase of 92.1% over the same period in 2022.
Shell opened its first petrol station in Yerevan on Thursday. "It's not just a petrol station, it's a new culture. By the quality of its products and level of services Shell will change the demand for services provided by petrol stations in Armenia, and we will see qualitative changes in the overall market,' Economy Minister Vahan Kerobyan said at the opening ceremony. According to him, the presence of this company in the country shows that Armenia is becoming an attractive location for major international investors. According to the Economy Ministry, Royal Oil LLC is the licensed representative of British-Dutch Shell Energy Corporation in Armenia. It intends to open about 25 Shell stations in the country within the upcoming five years. The goal is to create a chain of new generation petrol stations.
Turkey
Turkey eyes to surpass $120B in service exports toward year-end. The Trade Ministry has announced that service exports in the first four months amounted to $25.8 billion, with a target to surpass a total of $120 billion for the entire year. In a statement Friday, the Trade Ministry emphasized the need to bolster and support all sectors of export, including tourism, air, land, sea and rail transportation, health tourism, foreign student enrollment, informatics and software, as well as TV series exports. Highlighting Turkey's growth in service exports over the past two decades, the statement revealed a significant increase of over sixfold. Service exports, which stood at $14 billion in 2002, witnessed a 47% surge in 2022 compared to the previous year, setting a new record at $90.5 billion. Consequently, the services balance of $50 billion played a pivotal role in mitigating the current account deficit. Turkey's performance in international service exports propelled it to the 23rd position, accounting for a 1.3% share in the global market.
Antalya’s airports are witnessing the daily arrival of approximately 100,000 foreign tourists, Culture and Tourism Minister Mehmet Nuri Ersoy said.The number of tourists arriving in Antalya by air this year has surpassed the five million mark, reaching a total of 5,071,305. With a determined outlook, the city aspires to welcome a total of 16 million tourists by the end of this year.
Over the course of the first five months of the current year, the number of properties purchased by foreigners in Turkey decreased by 38%, amounting to 16,779 units. During this period, the southern Mediterranean province of Antalya emerged as the province with the highest number of homes sold, reaching a total of 6,446 units, closely followed by Istanbul with 5,329 units. Since the initiation of the Russia-Ukraine war, Antalya has successfully surpassed Istanbul and claimed the top position on the list. It has maintained its leadership in this sector throughout the remaining months of the year. In the first five months, a total of 1,231 residences were sold to foreigners in southern Mersin province, followed by 504 in the capital Ankara, 443 in northwestern Bursa, 427 in northwestern Yalova, 373 in western Izmir, 283 in southwestern Muğla, and 240 and 208 in northwestern provinces of Kocaeli and Sakarya. Muğla, which did not make it to the top 10 last year, secured the eighth position during the January-May period. The Russians emerged as the leading investors in housing, with the number of residences sold to Russian citizens reaching 5,723, reflecting an increase of 44.4%. Ukrainian citizens continued their housing investments, acquiring a total of 770 units. Notably, they advanced from sixth place last year to fourth place in the first five months of this year.
On June 26, the Turkish lira slid 1.8% to a fresh record low against the U.S. dollar after the central bank took steps to simplify rules governing lenders' holdings and foreign deposits, following its sharp interest rate hike on June 21. The lira fell to 25.76 against the dollar, surpassing last week's all-time low of 25.74. It was down 27% so far this year, largely after the re-election in late May of President Tayyip Erdogan who has since moved to backtrack on his years of unorthodox economic policy including slashing rates despite soaring inflation.
Azerbaijan
Azerbaijan’s state oil company SOCAR has sold its stake in Shah Deniz and the South Caucasus Pipeline. SOCAR has sold its 14.35 percent stake in Shah Deniz Production Sharing Agreement to Southern Gas Corridor Upstream LLC. Furthermore, the company has also transferred 14.35-percent shares in the South Caucasus Pipeline to Southern Gas Corridor Midstream LLC.
The average monthly nominal wages of employees in Baku in January-April 2023 amounted to 1,172.4 manats ($689.65). The average monthly nominal wage in the Azerbaijani capital increased by 9.9% year-on-year. In January-April 2023, the average monthly nominal wages of employees in Azerbaijan increased by 10.8% and reached 913.9 manats ($537.59).
The turnover of SMEs in Azerbaijan in 2022 increased by 19 percent $22.8 billion (to 38.8 billion manat) compared to 2021, Minister of Economy of Azerbaijan Mikayil Jabbarov said. From 2018 to 2021, the number of SMEs in Azerbaijan increased by 45 percent, while their contribution to non-oil GDP increased from 23.5 percent to 26.6 percent. In 2022, tax revenues increased by 61 percent to 2.9 billion manat ($1.7 billion).
Azerbaijan more than doubled volume of cashless payments. As of July 1, 2023, the number of payment cards in Azerbaijan amounted to 14,741,000, up 1.9% from a month earlier, 8.1% from early 2023, and 18.6% from a year ago. The number of debit cards in Azerbaijan increased by 17.3% to 12.762 million over the past year, and the number of credit cards soared by 27.3% to 1.979 million. The turnover of these cards amounted to 7.042 billion manats ($4.14 billion) (65.9% more than a year earlier) and 511 million manats ($300.4 million) (45.6% more), respectively. As of June 1, 2023, the amount of non-cash transactions with payment cards in Azerbaijan increased by 2.2 times to 3.930 billion ($2.31 billion). As of June 1, 2023, there were 3,075 ATMs (2.6% more than in the same period of 2022) in Azerbaijan, including 1,602 ATMs in Baku. The number of POS terminals went up 16.1% to 80,462, with 55,404 in Baku.
In April 2023, Azerbaijan exported 893.36 million cubic meters of gas to Turkey, up 21.73% from the previous year. Thus, Azerbaijan became the second gas supplier to Turkey, with a share of 22.43% in Turkey’s gas market. In April, Russia ranked first with the export of 1,722.44 million cubic meters of gas to Turkey, which is 8.49% less than a year ago. Iran ranked third with the export of 866.89 million cubic meters of gas, up 3.52% from April 2022. In the reporting period, Turkey imported 3,982.20 million cubic meters of gas, showing a 15.6% growth compared to the same period in 2022.
Azerbaijan increased cargo transportation by railway by 23%. In January-May of this year, 3,240,952 tons of cargo (+22.8%) worth $1,581,904 (+10.9%) were transported by railway in Azerbaijan. In particular, during 5 months, 1,327,557 tons of cargo (+24%) worth $552,616,000 (+22%) were exported, 1,913,394 tons of cargo (+21%) worth $1,029,287 (+4.8%) were imported.
TAP consortium said TAP has safely transported 25 bcm of Azerbaijani natural gas to Greece, Bulgaria and Italy since the start of commercial operations.
