gdp, $ billion and growth, · phase 3 reviewing budgets and debt obligations. in most instances...

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Covid-19 – Eurasia Check-up Watchate

April 7th 2020

Covid-19 in Eurasia: Moving to Phase 3

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

Eurasia Region (ex-Russia) 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 information and analysis concerning Russia’s

response and the economic impact in that economy.

Big jump in cases rise. The number of Covid-19 cases jumped

from 3,993 to 12,713 in the past week. The number of related

deaths rose from 33 to 145. Apart from Russia, the most affected

countries are Ukraine, Armenia and Belarus. The latter is still

refusing to impose any internal or social restrictions

Few exceptions. Turkmenistan and Tajikistan are still not

reporting any cases of the virus. Anecdotal evidence suggests it is

a growing problem in the former while the WHO confirms the

latter is still free of the disease. Turkmenistan has banned any

discussion or mention of the disease.

Oil rise provides currency relief. The rally in the oil price helped

the Russian ruble to appreciate 4.5% last week and that has

allowed almost all other regional currencies to move higher.

Kazakhstan reverses rate rise. The NBK boosted the policy rate

from 9.2% to 12% in March but, on Friday, it cut it back to 9.5%.

This is because the fear of a steeper currency collapse, which

would then endanger the banking system, has not materialized.

Moving to Phase 3. Most countries have now put in place

emergency measures to try and contain the spread of the virus.

That was Phase 1. Phase 2 was to ensure workers and key parts

of the economy are on life-supports. Phase 3 is when

governments take a closer look at their budgets, debt structures

and funding sources. In most countries these will need to be

changed. This process has now started in the Eurasia region with

Ukraine taking a lead because it needs to secure at least US$5

billion of additional IMF funding this year.

IFIs are stepping up. Apart from Ukraine, several other countries

are in active discussion with the World Bank, Asia Development

Bank and other international financial agencies. Some countries

will have to restructure existing debt.

Criticism of Russia. Russia has supplied some testing kits and

other medical equipment to countries in the region, except

Ukraine and Georgia. But, Armenia is critical that the support is

too little and has even questioned the reason for its membership

of the Eurasia Economic Union (EaEU).

Concerns about state surveillance. Some states are using mobile

phone data to enforce social distancing and curfews. This has led

to a lot of concern that the system may be abused.

Covid-19 in EurasiaPopulation*

Mln Cases Deaths

Armenia 2.96 833 8

Azerbaijan 10.11 641 7Georgia 3.99 195 2Belarus 9.45 700 13Kazakhstan 18.72 670 6Kyrgyz Republic 6.49 228 4Mongolia 3.26 15 0Russia 145.92 7,497 58Tajikistan 9.48 N/A N/ATurkmenistan 6.00 N/A N/AUkraine 43.80 1462 45Uzbekistan 33.34 472 2

Eurasia Total 293.52 12,713 145

Source: *Worldometers, **WHO at April 7th

Coronovirus**

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

Armenia Dram 499.38 -4.1%

Azerbaijan Manat 1.7 0.0%Georgia Lari 3.175 -9.8%Belarus Ruble 2.5514 -17.4%

Kazakhstan Tenge 436.63 -12.4%Kyrgyz Republic Som 84.898 -17.4%

Mongolia Togrog 2,766.57 -1.8%Russia Ruble 75.4646 -17.9%

Tajikistan Somoni 10.2183 -5.2%Turkmenistan Manat** 22 -5.2%

Ukraine Hryvnia 27.135 -14.1%Uzbekistan Som 9,550.00 -12.3%Brent, $ p/bbl $33.92 -48.6%Afghanistan Afgani 76.2 1.2%Iran Toman** 16,370 18.4%

Source: Bloomberg, Macro-Advisory

* as at April 7th

** 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 10.00% Mar -100

Russia 6.00% Mar no Tajikistan 12.75% Feb 50

Turkmenistan

Ukraine 10.00% Mar -100Uzbekistan 16.00% Feb no

Source: Central Banks, Macro-Advisory

* at April 7th

GDP, $ billion and Growth, %GDP 2020E

bln, $ 2019 2020E

Armenia $12.9 5.4% 4.9%Azerbaijan $44.6 3.0% 3.2%Georgia $58.0 1.2% 0.9%Belarus $15.8 5.0% 4.8%Kazakhstan $183.0 4.5% 3.8%Kyrgyz Republic $8.2 4.6% 4.0%Mongolia $13.6 5.1% 4.5%Russia $1,783.0 1.3% 2.0%Tajikistan $8.2 6.3% 5.7%Turkmenistan $52.0 6.3% 6.0%Ukraine $125.0 2.6% 2.8%Uzbekistan $58.3 5.5% 5.8%

Total, average $2,362.6 1.96% 2.43%

Source: Bloomberg, Macro-Advisory

GDP, % Change YoY

2

Covid-19 – Eurasia Check-up Watchars Update

The seven phases of Covid-19 economic management

Dealing with the crisis in stages. As with any crisis, there are different stages that follow in sequence for

adapting to the event, surviving through it, adapting to the changes and then managing the recovery phase.

All countries in the Eurasia region will face the same challenges. Some will struggle a great deal and will have

legacy problems for years afterwards. Others will adapt more quickly and may be able to take advantage of

the crisis to position them better for future growth. Below are the seven phases of dealing with, and

recovering from, a major economic crisis.

Note: we will individually review all fourteen economies in the broader Eurasia region (Iran, Afghanistan

and Mongolia included) to help our clients understand the effect of the crisis, and respective government

responses, on the business environment and concerning the future direction of their business sector.

Phase 1 Emergency measures to contain the spread of the virus and to bolster the health systems.

Phase2 Ensuring workers and families have access to at least basic subsistence and that key parts of

the economy are secured.

Phase 3 Reviewing budgets and debt obligations. In most instances this will involve cutting spending

plans to reflect lower tax receipts. In some instances it will also involve countries considering

debt restructuring, to reduce the debt service costs and/or delay redemptions. In a few

instances it will lead to talks with international donor agencies to access grants, aid or loans.

Phase 4 Policy reviews: Governments, and major corporations, will revisit their development plans

and strategies with the view to changing or re-prioritizing. This is because previous

assumptions are now changing; some for a calculated period of time and some others

indefinitely. Major companies will have to redo strategic plans to eliminate lost

opportunities and, in many instances, to position for emerging or newly created

opportunities.

Phase 5 The recovery phase: When the virus starts to subside or is brought under control,

governments will have to manage the recovery process carefully. It has always been

observed in history that many businesses struggle in the initial stages of an economic

recovery and there is a high instance of company failures. Access to cash flow, the recovery

of supply chains, the attitude of banks, and the availability of state support, are all factors

which will have to be taken into account and handled correctly.

Phase 6 The next issue will be staged reopening of the economy, i.e. which industries and sectors of

the economy are allowed to return to previous levels of activity and how quickly? There is

also the issue of customer engagement and how this handled. Not all previous customers

will be able, or willing, to reengage as they have previously done.

Phase 7 Managing the legacies. This may mean long-term government policy changes, e.g. an

emphasis on localization of key industries and process and a review of previous growth

plans, and specifically, how to make them happen. How to attract investment and to

improve the business and investment climate to attract investors at a time when all others

are trying to do the same. Major corporations will face the same issues.

3


Armenia

Reported cases: 833 + 351 (week-on-week)

Reported deaths: 8 + 5 (week-on-week)

Dram-US$ exchange rate: 499.38 0.4% (WoW) 0.4% (MTD) -4.1% (YTD)

Government actions & regulations

Help for SMEs. The Armenian government is offering financial assistance packages to SMEs in the tourism,

health, food and manufacturing industries. Companies that had an annual turnover between AMD24-500

million (Armenian dram) in 2019 are eligible to apply for interest-free loans for 24 months.

Agriculture. Agricultural loans are also available with zero percent interest and a three- to 12-month grace

period. The Ministry of the Economy has produced a series of webinars that offer advice to struggling

businesses.

Family assistance. Similarly, the Ministry of Labour and Social Affairs introduced the “ninth assistance

program” for families with children whose parents were unemployed between March 12th-31st. Eligible

families will receive AMD26,500 (Armenian dram) per child.

On April 1st, Armenia extended its stay at home order an additional ten days. In addition, traffic rules were

further tightened: public transport in Yerevan has been suspended, and police have set up roadblocks on

highways to reduce non-essential inter-city traffic. Citizens traveling in private vehicles must carry proof that

they are either essential workers or have an urgent need to travel.

Tracking mobile phone data. The Armenian parliament adopted a bill that would allow the government to

track mobile phone data. The Law on the State of Emergency and the Law on Electronic Communication will

allow the government to track people’s whereabouts in an effort to control the spread of the virus. In

responding to criticism about privacy concerns, the government insisted that the tracking will be limited to

those who are already infected and that the actual content of phone conversations will be protected.

Parliament adopted the law on March 31st after voting it down earlier that day.

Elections went ahead in disputed territory. Despite warnings from the international community, the disputed

territory of Nagorno-Karabakh held elections on March 31st. Although no cases of coronavirus had been

registered prior to the election, election monitors were sent to the territory anyway. Azerbaijan and closest

regional ally Turkey condemned the poll.

Armenia - Covid-19: New Cases (Bar - RHS) & Deaths (Line - LHS) April 7th

Source: World Health Organization

4


Monetary response and impact

No reason to assume debt growth. The national debt of Armenia will not grow from the antivirus package of

the authorities of the republic. This was stated at a briefing in the government by a member of the Board of

the Central Bank of Armenia Arthur Stepanyan. He noted that in order to support AMD150 billion (about

U$310 million) for recovery of the economy, announced by Prime Minister Nikol Pashinyan, the government

will not take external loans. These funds will be provided from internal sources - most likely from the budget

savings for 2019. “These funds remained on the account of the government at the Central Bank. From there,

probably, they will be taken,” Stepanyan added. Of these AMD150 billion, the main part, AMD80 billion, is

intended for strategic changes in the economy – the re-equipment of enterprises and the development of new

industries and technologies. These funds will not be available immediately. To do this, the government will

create a format for receiving and evaluating programs from business. Another ADM30 billion will be given to

the business to maintain current expenses: salaries, utility bills, procurement of raw materials for production

and so on.

Funds will be issued through banks. According to the government, they will better appreciate the financial

side of the projects and their payback. The government will interest-free finance part of the loans (from 25 to

50%).

Economic impact

Central Bank expects a big drop in growth this year. In a report issued last week by the Central Bank, GDP

growth was projected to be 0.7% for 2020. Last year, the rate was 7.6%. Minister of the Economy Tigran

Khachaturyan also said that difficulties in neighboring countries will weigh heavily on the economy

(particularly Russia, which is Armenia’s biggest export market and the largest source of remittances coming

into the country). In addition, Armenia’s tourism sector had been growing rapidly and is now essentially non-

functioning.

ADB is more optimistic. Reflecting the impact of the coronavirus (Covid-19) pandemic on Armenia’s economy,

the Asian Development Bank (ADB) has assessed that the country’s economic growth will slow to 2.2% in 2020

from 7.6% in 2019, with less rapid expansion in consumption. Planned increases in capital spending over the

medium term are seen as supporting growth.

Armenia Dram - US Dollar Exchange Rate

Source: Trading Economics

5


Azerbaijan


Reported Deaths: 7 + 4 (week-on-week)

Manat-US$ exchange rate: 1.70 0.0% (WoW) 0.0% (MTD) 0.0% (YTD)


Tax benefits and paid leave. The Economy Ministry announced a series of tax benefits, paid holidays, and

business incentives in order to assist people during the crisis period. Micro-enterprises will receive tax

benefits for a specified period of time, and taxpayers will be exempted from property tax, land tax, and income

tax for the same period.

Labour assistance. The Ministry of Labour announced that it has gathered 11,700 social workers to assist

people over 65 who are forbidden from leaving their homes.

Travel. The Baku metro suspended its service on March 31st and is due to begin again on April 20th. Bus service

will be regulated in accordance with passenger flow.

Restriction on vehicles. Since the beginning of the quarantine period, 16,256 vehicles have been denied entry

or exit at the boundaries of the city limits because of potential quarantine violations. On April 2nd alone, 12

people were arrested for violating the new rules, and administrative fines were imposed on 1,243.

Electronic monitoring of people. On April 5th, the country will implement an electronic monitoring system

whereby people will be forced to send an sms (text) message before leaving their homes to go to the doctor,

to shop for food, go to the bank or conduct other essential services (only once per day), to attend a funeral,

or to walk for 30 minutes within a 200-meter radius of their homes. Azerbaijani officials said that there were

too many violations of the existing rules, which stated that people should only leave their homes for essential

purposes, and that many people were found on the streets with no particular purpose. Because of increasing

case numbers, the authorities say that the measure is necessary to contain the disease.

Power police powers. People should be prepared to be stopped on the street and questioned about their

purpose for being out. They will also be required to wear masks.

Concerns about freedoms. Watchdog groups believe that this will lead to excessive invasion of people’s

privacy, as has been seen in other parts of the world. The Azerbaijani government has again been accused of

human rights violations in using the crisis situation as an excuse to crack down on opposition parties and

human rights groups.

Azerbaijan - Covid-19: New Cases (Bar - RHS) & Deaths (Line - LHS) April 7th


6



Interest rate unchanged. The Board of the Central Bank of Azerbaijan (CBA) has decided to leave the interest

rate unchanged at 7.25 percent, Trend reports on March 19th referring to the CBA. At the same time, the upper

limit of the interest rate corridor is maintained at 9 percent and the lower limit was increased up to 6.75

percent. This decision was made amid significant changes in the global environment and uncertainty that has

arisen under its influence since the recent meeting of the Monetary Policy Council. In connection with the

adverse impact of coronavirus on the world economy, as well as breaking of the OPEC + agreement among

the main oil exporters since the beginning of March led to lower oil prices up to a level of more than two years

ago.

Economy & Trade

Oil drop concerns. There are continued concerns about the price of oil and how it will affect the country’s

economy. The Minister of the Economy, Mikail Jabbarov, said that an oil price of US$21-22 per barrel indicates

“the period after oil” for the country. He said that entrepreneurs in other sectors of the economy must step

up their efforts to compensate for the drop in oil price, and that legislation will be adjusted accordingly. Many

believe that Azerbaijan’s other sectors are severely underdeveloped and that the country will suffer greatly

without oil revenues near previous levels.

Fiscal policy is expected to become more expansionary in 2020 with the budget deficit rising to at least 3.4%

of GDP—or 17.2% when excluding transfers from the State Oil Fund of Azerbaijan (SOFAZ)—as higher social

spending and continued strong public investment boost total expenditure by 10.2%. The current account

surplus is forecast to narrow to 4.4% of GDP in 2020 and widen to 6.3% in 2021. Merchandise imports are

projected to contract by 37.8% in 2020 as Covid-19 cuts total trade, in particular the 10% of imports that come

from China, and recover by 23.5% in 2021 as domestic demand is restored and the situation stabilizes.

Lower oil will hit the growth rate. The drop in oil prices, amid the coronavirus (Covid-19) outbreak, will slash

growth in Azerbaijan to 0.5% in 2020 from 2.2% in 2019, while an expected recovery in oil prices and higher

oil and gas production are projected to raise growth to 1.5% in 2021. Expansion in industry, projected by the

ADB at 0.5% in 2020 and 2.0% in 2021, will come from stronger hydrocarbon performance, in particular higher

output at the Shah Deniz II gas field with the completion in 2020 of the Trans Adriatic Pipeline (TAP) that will

carry Azerbaijani gas from Turkey to Italy.

No plans to cut oil output. Azerbaijan has said it is not planning to change its oil production plans for 2020.

The statement comes despite the collapse of an OPEC+ output deal. Last month, the RIA news agency said,

citing the country’s energy ministry.

Azerbaijan Manat - US Dollar Exchange Rate


7


Belarus


Reported deaths: 13 13 (week-on-week)

Ruble-US$ exchange rate: 2.551 +1.3% (WoW) +1.3% (MTD) - 17.4% (YTD)


Lukashenko focused on economic wellbeing. President Lukashenko believes that the biggest challenge for

the nation at the moment is the economic meltdown, but not the health of its citizens. "The biggest problem

we are facing now is the economic situation, although we are trying hard to keep domestic companies working

and make sure people get paid," state news agency BELTA quoted Lukashenko as saying on March 31st.

Lukashenko spurns lockdown measures. Lukashenko also slammed stay-at-home orders as an inefficient

means of fighting the coronavirus pandemic. “Locking people up in stagnant apartments is not a solution,"

news agency BelaPAN quoted him as saying. "We are killing people in these apartments. We have always been

taught, and you remember that, that in the event of an acute respiratory viral infection, flu, one needs to go

outside, breathe fresh air, let fresh air into the room."

Debt level

Sovereign rating unchanged. The rating agency Moody's has confirmed the assessment of the credit profile

of Belarus at the level of B3, the forecast is stable, BelTA informs with reference to the agency’s website.

External debt. As of February 1st, the external state debt of Belarus amounted to US$16.9 billion, having

decreased by US$0.2 billion since the beginning of the year (taking into account exchange rate differences),

or 1.2%, BelTA learned from the Finance Ministry.

Total state debt. As of February 1st, the state debt of Belarus amounted to BR45.1 billion and increased

compared to the beginning of 2020 by BR0.3 billion, or 0.6%. As of February 1st, domestic government debt

amounted to BR8.9 billion, having increased by BR0.1 billion since the beginning of the year (taking into

account exchange rate differences), or by 1.4%. In January, domestic foreign currency government bonds for

legal entities and individuals totalling US$78.3 million were placed.

Belarus - Covid-19: New Cases (Bar - RHS) & Deaths (Line - LHS) April 7th


8



No change to currency management. The National Bank of Belarus does not intend to abandon the

implementation of the exchange rate policy in a floating rate regime due to negative external economic

factors.

Financial reserves. Belarus gold and currency reserves dropped 4.7% to US$8.8 billion in February. In

February, foreign exchange reserves decreased by US$438.2 million (by 4.7%) after a decrease in January by

US$150.4 million (by 1.6%). The decrease in the level of international reserve assets in February was mainly

due to the planned repayment by the government and the National Bank of foreign and domestic obligations

in foreign currency totalling US$383.5 million, as well as the sale of foreign currency by the National Bank at

the auctions.

Economy & Trade

Results for 1-2M 2020:

Belarus’s GDP in January - February 2020 fell by 0.6% compared to the same period last year,

according to the National Statistical Committee.

Agricultural production in Belarus in January-February increased by 6%

Industrial production in Belarus in January-February decreased by 3.3%

Belarus's merchandise trade deficit stood at US$1.0 billion in January-February vs. a deficit of US$530

million in the first two months of the previous year, according to the country’s state statistics service

Belstat. Exports totalled US$4.3 billion (a 14.3% year-on-year fall), while imports amounted to US$5.3

billion (a decrease of 4.2%).

Belarus Ruble - US Dollar Exchange Rate


9


Georgia



Lari -US$ exchange Rate: 3.175 + 3.5% (WoW) +3.5% (MTD) – 9.8% (YTD)


Overnight curfew. Georgia has imposed an overnight curfew, closed its public transport systems, including

the Tbilisi metro, and banned gatherings of more than three people, effective March 31st, in stepping up its

efforts at battling the spread of the coronavirus (Covid-19), Prime Minister Giorgi Gakharia has announced.

According to his statement, the movement of pedestrians and municipal transport vehicles would be

prohibited from 21:00 till 06:00.

Restrictions on daytime travel. During daytime hours, it is now only permitted to travel in light vehicles

(including taxis), and only if there are no more than three persons in the vehicle, with the essential condition

that the non-driving passengers are in the rear seat. All citizens have been told to carry ID when venturing out.

People aged over 70 are only allowed to leave their home to go to the nearest grocery or pharmacy. Prime

Minister Gakharia said that special checkpoints would be set up in Tbilisi and six of the country’s other

substantially sized cities to screen people and enforce the rules. Nearly 1,000 people have been fined for

breaking state of emergency rules since the beginning of their implementation. People have been found

breaking the nationwide curfew between 21:00-06:00, gathering more than ten people in one place, violating

rules of quarantine and self-isolation, violating restrictions on business activities, and violating restrictions on

driving.

Some utility bills to be paid. The government will also pay utility bills of small Georgian households over a

three-month period, in March, April and May. The recipients will be households that use less than 200kW of

electricity per month and 200 cubic metres of gas per month.

Funds allocated but few details. Georgia will this year spend Georgian lari (GEL) 2.0 billion (US$606 million),

equivalent to more than 3% of its GDP, from the state budget to help its economy overcome the impact of the

coronavirus pandemic, the PM said. The money would be used “to maintain jobs and help companies continue

production,” without providing many details about how the money would be spent precisely.

Testing criteria. The Ministry of Health expanded a list of testing criteria for the virus to include high-risk

groups such as frontline medical personnel. Previously, those eligible for testing included only people who

had travelled to affected countries and those who had come into contact with patients already diagnosed.

Georgia - Covid-19: New Cases (Bar - RHS) & Deaths (Line - LHS) April 7th


10


No more than five employees from any given company are permitted to work in a single office space . The

government amended a decree that had initially been issued on March 23rd stating what type of economic

activities are authorized to continue functioning according to state of emergency regulations. According to

the amendment, gas and oil production companies, businesses working remotely, and home delivery services

of food and medical supplies will be able to resume operations until the end of the state of emergency on

April 21st.

South Ossetia closes the border. On April 2nd, the disputed region of South Ossetia closed the crossing-point

of Roki for an undetermined period of time. South Ossetian officials made this decision following the first of

what is now two recorded coronavirus cases in the region. Residents of Tskhinvali will be allowed to return

to the region and must undertake a 14-day self-isolation period.


Easing of bank’s capital regulations. The central bank has relaxed regulatory requirements in moves that

include the release of some Georgian lari (GEL) 1.6bn (US$480 million) of a GEL4 billion buffer held by its

commercial banks above regulatory ratios, in order to allow the banking sector to neutralize potential losses

and continue normal business operations and lending to the real economy amid the coronavirus (COVID-19)

health and economic emergency .The GEL1.6 billion released to the banks is equivalent to 2.5% of the

country’s GDP.

However, the decision of the National Bank has one condition: banks should not apply for the proceeds to

issue management bonuses and dividends to shareholders. Also, with the aforementioned amount, banks

should not finance repurchase operations of their own shares on the stock exchange.

Bank notes. The Central Bank is keeping cash in storage for 14 days before releasing it. It is also encouraging

people to make purchases without the use of physical contact.

Growth scenarios. The National Bank in its forecast for the development of the Georgian economy considers

three scenarios. The basic scenario reflects the expected state of the economy in which risk factors are

balanced by the right policy. According to this scenario, economic activity will maintain existing development

trends in the near future, the trade balance will improve and will have a positive impact on real growth.

indicator basic optimistic pessimistic

Economic growth, % 4.5 5.5 2.5

Inflation, % 4.5 4.5 7

Lari to US$ Will not change Strengthens by 5% Falls by 10%

Georgia Lari - US Dollar Exchange Rate


11


Kazakhstan


Reported deaths: 6 +4 (week-on-week)

Tenge-US$ exchange rate: 436.63 + 2.7% (WoW) + 2.7% (MTD) - 12.4% (YTD)


New hospitals. Three infectious diseases hospitals will be constructed in Kazakhstan using prefabricated

structures to battle coronavirus spread in the country. The hospitals will be constructed in Nur-Sultan, Almaty

and Shymkent cities.

Tax relief for small businesses. President Tokayev confirmed that the government would delay tax payments

for small businesses and would consider more than tripling spending on a temporary employment program

focused on infrastructure maintenance and construction projects.

Debt repayment standstill. As part of the stimulus, Tokayev has ordered a standstill on bank loan repayments

by individuals and small and medium sized enterprises (SMEs) for the duration of the state of emergency. The

state of emergency is set to last until April 15th, but can be extended.

Income support. During the same period, the government will pay KZT42,500 (US$95) per month to citizens

who have lost their source of income.

Export quotas. Kazakhstan is to introduce quotas on its exports of wheat and flour and lift the ban on wheat

flour exports introduced last week. The switch is a measure aimed at ensuring steady domestic supplies amid

the coronavirus (Covid-19) crisis, the Kazakh Agriculture Ministry said on March 30th. The country officially had

9.2mn tonnes of grain in stock as of March 1st, including 6.4 million tonnes of food grains.

More money to be provided. Kazakhstan is loosening its purse strings to minimize the broader social impact

of the crisis. On March 31st, President Tokayev announced more details of a package intended to bolster

support for welfare recipients and help business weather the storm. 5.9 trillion tenge (US$13 billion) were

being earmarked for that purpose.

Also from the Sovereign Fund. Kazakhstan will also draw an extra Kazakhstani tenge (KZT) 1.825 trillion (€3.72

billion) from its rainy day National Fund this year, Information Minister Abayev said on March 30th. The 67%

increase in the annual withdrawal of financing from the fund will be poured into Kazakhstan's US$10 billion

stimulus package aimed at curbing the double whammy of the coronavirus pandemic and collapsed world oil

prices. The National Fund is currently worth around US$60 billion.

Kazakhstan - Covid-19: New Cases (Bar - RHS) & Deaths (Line - LHS) April 7th


12



Reduced the policy rate after only one month. Kazakhstan's central bank, in an emergency move, cut its policy

rate to 9.5% from 12% on April 3, the bank’s governor Dosayev said. The decision follows the regulator hiking

the rate to 12% from 9.25% last month due to exchange rate risks seen as regards the Kazakh national

currency, the tenge, and inflation risks stemming from the collapse of world oil prices. The reversal of the

decision took place amid gathering economic pressures caused by the coronavirus pandemic and measures

taken against its spread. The central bank also widened its rate band to +/-400 basis points from +/-150 basis

points, Dosayev added.

Planning to raise new debt. Speaking at a press conference this week, First Deputy Finance Minister

Sholpankulov said that the government intends to raise 2.4 trillion tenge (US$5.3 billion) in debt to paper over

its budget deficit. About US$3 billion will be raised on the international debt market, he said.

Economic actions and impact

Help for SMEs. President Tokayev announced new measures to support small and medium-sized businesses

in the state of emergency declared in the country. "To support SMEs affected by the coronavirus, I instruct

the National Bank, together with the Financial Market Regulation Agency, to provide soft loans to working

capital of SMEs in the amount of 600 billion tenge for 1 year at a rate for the borrower of 8%," Tokayev wrote.

This amount is equivalent to US$1.3 billion at the rate of the National Bank on March 19th. Tokaev also noted

that the financial regulator is obliged to provide a clear mechanism for bringing funds to the ultimate

borrower. "Given the growth in financing the Economics of Simple Things program, the amount of support for

domestic business will amount to 1 trillion tenge," the president added. The government will be responsible

for the targeted use of funds.

GDP contraction expected. Kazakh economy minister Dalenov said on April 2n that Kazakhstan’s economy was

expected to contract 0.9% this year, driven by lower oil prices and output. This would force the government

to withdraw more financing from its rainy-day fund. The country currently plans to produce 86 million tonnes

of oil in 2020, down from the previous forecast of 90 million tonnes, Dalenov told a government meeting.

“Exports will drop by US$16.3 billion to US$35.1 billion. Imports will decline by US$7.5 billion to

US$26.6 billion,” he said. “[Anticipated] nominal GDP is estimated at 69.7 trillion tenge [US$155

billion], which is 4.8 trillion tenge [US$10.6 billion] lower than the earlier forecast.”

“Bearing that in mind, the average [assumed] price for oil in April-December has been set at US$20

per barrel. The estimated dollar rate is 440 tenge and annual inflation will be in the range of 9-11%,”

Forecasts on oil production are being trimmed too. Output is now set at 86 million tonnes, down by 4 million

tonnes. Large slumps are anticipated in the mining, manufacturing, agriculture, construction and service

industries, as well as in trade.

Kazakh Tenge - US Dollar Exchange Rate


13


Kyrgyz Republic

Reported cases: 228 +111 (Week on week)


Som - US$ exchange Rate: 84.898 - 4.7% (WoW) - 4.7% (MTD) - 17.8% (YTD)


Looking to reopen China trade. Deputy Prime Minister Boronov told a press briefing on March 30th

that Kyrgyzstan has asked China to relaunch the movement of goods across the Chinese-Kyrgyz border, which

was suspended by Beijing in early February. “The Kyrgyz border is currently closed for entry to people who

are not Kyrgyz citizens.

Negotiating debt. Deputy Prime Minister Erkin Asrandiyev told a briefing on March 23rd that Kyrgyzstan is

currently in talks with creditors to restructure its sovereign foreign debt. Asrandiyev mentioned the talks in

the context of the impact of the coronavirus (Covid-19) pandemic on the Central Asian nation and the global

economic slowdown. He did not provide any details about the talks. The deputy PM also mentioned

that Kyrgyzstan has requested aid from international donors in order to combat the spread of coronavirus in

the country.

IMF aid. The International Monetary Fund (IMF) on March 26th approved a US$120.9 million disbursement

to Kyrgyzstan to help meet urgent balance of payment needs resulting from the coronavirus (Covid-19)

pandemic.

Technical aid from Switzerland. Switzerland’s government granted personal protective equipment to mobile

units of Kyrgyzstan’s Family Centre of Medicine of Chui Region and Regional Family Centre of Medicine of

Pervomaysky District on March 27th, the Swiss embassy said

World Bank aid. The World Bank approved US$12.15 million from the IDA for the Covid-19 project. In addition,

US$9 million dollars is being reallocated from the ongoing World Bank-financed Enhancing Resilience in

Kyrgyzstan Project which has a mechanism known as a Contingent Emergency Response Component (CERC)

that allows governments to quickly access undisbursed funds in World Bank projects to respond to

emergencies.

Kyrgyz Republic - Covid-19: New Cases (Bar - RHS) & Deaths (Line - LHS) April 7th


14


Business hit. Bishkek-based Akun, a major Kyrgyz flour milling company, announced last week that it is to

suspend operations due to employees not being able to receive permits needed to get past checkpoints set

up to enforce the coronavirus (Covid-19)-related lockdown. The company said it filed applications for the

permits a week prior but that the paperwork had apparently been lost.

Monetary response and IMF aid loan

No change to policy rate. Kyrgyzstan’s central bank kept its policy rate unchanged at 5% on March 31st, the

regulator said. It attributed the decision to an expected slowdown in economic growth due to the global

pandemic-driven downturn and a pick-up in inflation. Consumer prices in Kyrgyzstan moved up by 3.7% y/y in

February, compared to a 3.2% y/y increase recorded in January, latest data published by the country's national

statistics body shows.

The central bank also said that it would stick to a free float exchange rate regime, but would support the

Kyrgyz som via interventions to prevent sharp exchange rate fluctuations.

Modest interventions. To stabilize the situation in the foreign exchange market, the National Bank of

Kyrgyzstan conducted the fourth intervention in a month. This was reported on the official website of the

regulator. It is noted that during the bidding US$3.7 million was sold with settlements different from the date

of the transaction. In March, the National Bank of the Kyrgyz Republic sold US$109.7 million in the market.

Economic impact

Good start to the year because of gold. After the recession over the past six months in February 2020 GDP

growth accelerated. However, this is only to the good pace of gold mining. Plus, the effects of coronavirus

related measures have not yet been evaluated. According to the results of January-February this year, the

country's GDP amounted to KZS69 billion 31.2 million. According to the results of two months of the year, the

economy of the republic grew by 4.3%. Compared to the first month of 2020, GDP growth accelerated

immediately by 2.5%. It was provided by industry, construction, agriculture and the service sector. The growth

of commodity production sectors, in contrast to January-February 2019, amounted to 6.9%, and the sectors

providing services - 2.4%.

Kyrgyz Som - US Dollar Exchange Rate


15


Mongolia Republic

Reported cases: 15 +3 (week-on-week)


Togrog-US$ exchange rate: 2,766.57 + 0.2% (YoY) + 0.2% (MTD) -1.8% (YTD)


Government aid. Mongolia’s government has announced an MNT5tn (US$1.6 billion) stimulus package to

support the economy hit by restrictions and social distancing

Employee support. For three months, the government will pay private companies a monthly MNT200,000 for

every private company employee in order to keep the employees employed in their current jobs despite the

difficulties in business and declining revenues at their companies.

Reduced rate loans. Loans with a 3% interest rate worth a total of MNT300 billion will be granted to national

cashmere companies by the Mongolian government to finance purchasing of cashmere from herders. The

price of cashmere will be set at less than MNT100,000. This measure is aimed at helping 233,000 herding

families.

Child support. For three months, the monthly ‘Child Money’ allowance of MNT20,000 for children aged under

18 will be raised to MNT30,000.

Fuel cost control. Measures will be taken to cut the retail price of fuel per liter by MNT 300-400 starting

from April 15th.

Business impact. Around 67.4% of Mongolian companies were “highly affected” by the outbreak

the Mongolian National Chamber of Commerce and Industry has said.

World Bank aid. The World Bank on April 2nd approved US$26.9 million in funding for the Mongolia

Coronavirus Emergency Response and Health System Project in order to meet emergency needs in the face

of the pandemic and prepare for future health crises.

Mongolia - Covid-19: New Cases (Bar - RHS) & Deaths (Line - LHS) April 7th


https://www.worldbank.org/en/news/loans-credits/2020/04/02/mongolia-covid-19-coronavirus-emergency-response-and-health-system-preparedness-project

https://www.worldbank.org/en/news/loans-credits/2020/04/02/mongolia-covid-19-coronavirus-emergency-response-and-health-system-preparedness-project

16



Set to cut fees. Mongolia’s central bank has announced an initiative to reduce interbank transaction fees for

commercial banks by 20% starting from April 1st.

Currency support. Since the beginning of March 2020, the Central Bank of Mongolia has sold about US$133

million in the foreign exchange market in order to stabilize the national currency. This was reported today by

local media, citing data from the regulator. "

Economic impact

Trade impact. Mongolia's foreign trade turnover in January-February 2020 amounted to US$1.5 billion, which

is 21.3% less compared to the same period last year. This was announced today by the National Statistical

Committee of Mongolia. Over the specified period, Mongolia's exports fell by 29.5%, amounting to US$770.7

million. Meanwhile, imports also fell by 10.4%, to US$750 million.

China coal exports restarting. Coal exports through Mongolia's Shiveekhuren border dry port and the Khangi

border checkpoint resumed on March 30th and March 31st, respectively, according to state-

run media. Earlier, Mongolia resumed coal shipments to China via the Gashuunsukhait border checkpoint on

March 23rd after a two-month-long suspension on all coal exports aimed at combatting the spread of the

coronavirus (pandemic. Mongolia’s coal exports in January-February plummeted by 45% to 2.8 million tonnes

as a result of the suspension of the country’s coal and petroleum exports to China, which imports nearly all of

the Central Asian nation’s coal.

Mongolia Togrog - US Dollar Exchange Rate


17


Tajikistan

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

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

Somoni - US$ exchange rate: 10,218 - 0.2% (WoW) - 0.2% (MTD) -5.2% (YTD)


Tajikistan, so far, has not confirmed a single coronavirus infection, though this might be due to its lack of

capacity for testing. The Tajik side has received Chinese reagent kits for detecting nucleic acids of Covid-19.

The kits should allow for around 2,000 tests. China also handed over 1,000 sets of medical protective clothing,

500 pieces of non-contact thermometers for measuring temperature, 1,000 pairs of medical glasses, 1,000

pairs of disposable medical gloves and 1,000 pairs of disposable medical footwear coverings.

WHO agrees. World Health Organization Representative in Tajikistan, Galina Perfilyeva, has officially declared

the absence of Covid-19 cases in the country, Asia-Plus reported. In her appearance on the TV Channel

Perfilyeva asked the population to practice personal hygiene and refrain from visiting crowded public places.

According to her, more than 700 coronavirus tests have been conducted and all tests were negative. She

further said that Tajikistan had sufficient supply of coronavirus test systems. In accordance with WHO

recommendations, only persons with symptoms of coronavirus are tested for coronavirus disease.

Improving facilities. According to the World Bank, the financing will help establish around 100 new, fully

equipped Intensive Care Unit (ICU) beds in health facilities across Tajikistan.

World Bank aid. The World Bank’s Board of Executive Directors approved US$11.3 million in grant financing

from the International Development Association for the Tajikistan Emergency Covid-19 Project,

The US Agency for International Development in Tajikistan and the World Health Organisation handed over

personal protective equipment to the Ministry of Health and Social Protection of the Population.

Asking Moscow to help migrant workers. Tajikistan’s Embassy in Moscow intends to request the Russian

Government to postpone tax and patent payment deadlines for Tajik labour migrants. According to data from

Russia’s migration agency, more than 1 million Tajik labour migrants are currently staying and working in the

Russian Federation.

Tajikistan Somoni - US Dollar Exchange Rate


18


Turkmenistan

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

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

Manat (Commercial) US$ FX rate: 22.0 -2.3 (WoW) - 2.3% (MTD) - 5.2% (YTD)


No cases reported. The official authorities claim that no confirmed cases of coronavirus have been recorded

in Turkmenistan.

Banned discussion about the virus. The word “coronavirus” has reportedly been banned from use in public

discussion inside the country. Nevertheless, all of Turkmenistan’s measures to contain the spread of the virus,

such as the lockdown of its capital Ashgabat, paint a different picture as to the Covid-19 situation in the

country. Plainclothes agents in Turkmenistan’s capital Ashgabat have reportedly been arresting people

uttering the word “coronavirus” or discussing the pandemic in public.

Isolation of travelers. Since early March Turkmen nationals who arrived in Turkmenistan on inbound

international flights have been obliged to undergo two-week quarantine in Turkmenabat.

Quarantine centres. A similar camping site, according to the sources of “Chronicles of Turkmenistan”, has

been put up in the city of Nebit-Dag, Lebap velayat. The passengers from the ferry which arrived from

Azerbaijan were forcibly placed there.

Calming protestors with flour. Authorities in Turkmenistan’s Mary Region calmed protesters demonstrating

against food shortages on April 3rd by handing out sacks of flour. Turkmen citizens have suffered from

shortages of basic goods for more than three years, but recent restrictions imposed due to the coronavirus

(Covid-19) pandemic have led to further cuts in food distribution.

Police checkpoints. The state information agency TDH reports that the booths will be organized in the most

densely populated districts of the capital and provinces. District police inspectors, representatives of public

order policing and the road traffic police of the Interior Ministry are obliged to keep vigil round-the-clock at

these stations. The main functions of the stations are to ensure law and order, to enhance the level of personal

security of residents and property protection, to render first aid and to carry out awareness raising campaigns.

The President instructed that the stations are equipped with modern means of communications and state-of-

the-art technology.

Freight transit is stopped. Turkmenistan has suspended the movement of freight traffic via its territory due

to the coronavirus pandemic, according to a foreign ministry document posted online by a Kazakh

businessman. Reuters on April 1st confirmed the validity of the document with two anonymous diplomatic

sources in Turkmenistan.

The President called for identifying the additional sources of funding, attracting the investments into the

economy and extending the loan program for small and medium size businesses, making a list of companies

which need to be provided with deferred tax and loan payments.

US dollar payments banned. The Central Bank of Turkmenistan has ordered financial institutions to

stop making cash payments in US dollars to those who get their salaries paid in foreign currency effective 1st

April, 2020.

19


Affects spending power. This means that an employee whose salary was US$1,000, for example, can get 3,500

manats in the bank despite the fact that he could previously obtain 20,000 manats by exchanging foreign

currency at “the black market”. The bank staff informed residents that they can deposit their salaries in dollars

to the dollar Visa bank card to be used during overseas trips.

However, this is currently impossible for two reasons. First of all, a daily limit for withdrawals and the use of

cards overseas is less than US$50. Secondly, due to the pandemic of coronavirus a travel ban has been

imposed.

“The black market” of foreign currency immediately responded to this decision. Correspondents of

“Chronicles of Turkmenistan” report that as of April 2nd the dollar buying rate was 21 manats and the dollar

selling rate amounted to 22 manats. As of April 7th, the dollar buying rate was 21.50 manats and the dollar

selling rate amounted to 22.0

Ban on all FX transactions. Turkmenistan has banned the withdrawal of cash in foreign currencies from banks

as of April 1st, RFE/RL’s Turkmen Service reported, citing anonymous bank officials.

Cotton harvest. Turkmenistan has launched its cotton harvest for this year with the aim of collecting 1.25

million tonnes of cotton, Turkmenistan.ru news website has reported. Asian nation relies on the use of child

labour and forced labour in cotton harvesting—a common Soviet-era practice, which was recently officially

banned and phased out in neighbouring Uzbekistan. During Soviet times, the country’s agriculture was almost

entirely focused on cotton. It ranked second after Uzbekistan in cotton production within the Soviet Union.

Turkmenistan Manat (Commercial Rate) -US Dollar Exchange Rate

Source: Chronicles of Turkmenistan

20


Ukraine


Reported deaths: 45 + 32 (week-on- week)

Hryvnia-US$ exchange rate: 27.135 + 1.7% (WoW) + 1.7% (MTD) - 12.3% (YTD)


Talking about loosening the lockdown. The Ukrainian government will begin loosening the lockdown in late

April and anticipates a "restart" of the economy in May, Prime Minister Shmyhal said in a video address on

April 3rd, quoted by nv.ua. "We have not and will not stop the exchange of goods, industrial enterprises

and critical infrastructure," he said. "All of that is working and will continue to work. Ukraine can't afford to

stop working for six months, or even two to three months."

Shmyhal added that the lifting of the lockdown will be done in several stages. "First, working-age people will

return to their employment," he explained. "Simultaneously, public transportation will be restored. That will

allow us to restart the economy as of May." However, some other lockdown measures could still remain in

effect, he concluded.

German aid. Germany "to redirect" €150mn within a state Berlin loan for Ukraine's fight against the

coronavirus (Covid-19) crisis, the media office of Ukrainian President Volodymyr Zelenskiy said on March 30th

following his phone conversation with Federal Chancellor of Germany Angela Merkel.

Budget changes

Proposed changes now being reviewed. The Cabinet of Ministers of Ukraine proposed to the Rada changes

to the state budget for 2020, which provide for a reduction in revenues of UAH115 billion and an increase in

expenses of UAH96 billion. This was announced in his Telegram channel by MP Aleksey Goncharenko. “Among

other things, they propose: reduce state budget revenues by UAH115 billion, increase expenses by UAH96

billion. Accordingly, the state budget deficit will increase by UAH202 billion, or almost four times.”

Goncharenko noted that to cover the deficit, the government proposes to increase domestic

borrowing by UAH147 billion and external by UAH131 billion, as well as create a stabilization fund in

the state budget by UAH124 billion. According to the deputy, the Cabinet of Ministers proposes to

completely abandon "programs for the development of education (including the New Ukrainian

School program), regional development (GFRR, the OTG subvention for infrastructure, social

economy), and support for agricultural producers." "The Cabinet also proposes to reduce the cost of

subsidies by UAH8 billion, to stop financing the Ukrainian Cultural Fund," the deputy noted.

Ukraine - Covid-19: New Cases (Bar - RHS) & Deaths (Line - LHS) April 7th


21


In addition, it is proposed to reduce funding for road works by almost UA 8 billion, to cancel support

for national cinema, theatres, and the Ukrainian Book Institute. In addition, spending on sports,

including persons with disabilities, is being cut.

IMF Support

Confident that the money will be released. Ukraine's Finance Ministry hopes to be able to collect up to US$5

billion from the International Monetary Fund, Finance Minister Marchenko was quoted as saying by

Interfax Ukraine on April 3rd. "We have fixed this, and we can say that these are the main provisions," he said,

commenting on recent negotiations between Ukraine and the IMF. He added that to receive the Extended

Fund Facility (EFF) from the IMF, it is necessary to agree on a technical memorandum and pass the final

package of laws by the Rada, specifically on banks and amendments to the national budget for 2020. "If this

package of laws is voted [through], there is hope that we will receive a tranche to the budget in the near

future," Marchenko said.


Easing of restrictions for bond purchases. The Council of the National Bank of Ukraine (NBU) has removed a

restriction on the NBU on purchasing local government bonds, the finclub.net news outlet reported on April

2nd, citing a council resolution. The ban was introduced in July 2018. The council also recommended the NBU

board should "create preconditions for easing the consequences of economic recession and preserving price

and financial stability".

Fitch Rating Agency affirmed Ukraine’s long-term foreign and local currency default rating of “B”. The

outlook on the ratings is positive, according to the organization’s website. The short-term foreign and local

currency rating is also affirmed at 'B' with a stable outlook. The international rating agency Fitch Ratings

expects acceleration of economic growth in Ukraine in 2020 to 3.5% from 3.2% in 2019. According to the

agency’s website, in 2021, economic growth will accelerate to 3.8%.

Economic impact

Big increase in unemployment. The Ukrainian government predicts that 10% of the country's workforce will

lose their jobs as a result of the economic downturn caused by the coronavirus pandemic. The government

also said that Ukrainians' wages, adjusted for inflation, will contract by 4.5% this year compared with 2019, to

UAH10,706 (US$381). Meanwhile, inflation is predicted to stand at 11.6% in 2020.

The government also painted a grim picture for Ukraine's foreign trade prospects. Exports of goods and

services are expected to decline by 5.5%, year on year, while imports are projected to go down by 10%.

GDP decline. The government foresees a decline in GDP of 4.8% compared with 2019.

Ukraine Hyrvnia-US Dollar Exchange Rate


22


Uzbekistan

Reported cases: 472 +322 (week-on-week)


Som-US$ exchange rate: 9,615.88 - 0.7% (WoW) - 0.7% (MTD) -0.8% (YTD)


China aid. The first batch of humanitarian aid from the Chinese government was delivered to Tashkent, among

which are medical supplies such as test systems, infrared thermometers, protective gowns, glasses, shoe

covers and gloves. This was reported by the press service of the Chinese Embassy in Uzbekistan. At the same

time, the Chinese provinces and dozens of Chinese companies also prepared medical supplies as humanitarian

aid, and recently some of them were already handed over to the Uzbek side.

Tighter restrictions. Shopping facilities and supermarkets, citizens will have to go through temperature

screening. All hypermarkets throughout the country will be equipped with pyrometers and antiseptic agents

in just two days. If the temperature is 37 degrees or higher, entry to shopping facilities will be prohibited.

These citizens are advised to urgently contact the emergency medical service.

Parliament tested. All Members of the Senate of Oliy Majlis and its staff have been tested for coronavirus.

ADB aid. Uzbekistan has asked the Asian Development Bank (ADB) for a US$1 billion budget support loan, the

Uzbek Ministry of Investments and Foreign Trade said on April 1st. ADB has set up a team to

review Uzbekistan’s request.

EU grant. The Uzbek government and the EU have signed a financing agreement to grant €40 million in

budgetary support and complementary assistance for the reforms of the Uzbek agrifood sector, the

Delegation of the European Union to Uzbekistan reported.

USAID. The US government, through the US Agency for International Development (USAID), has announced

an additional contribution to Uzbekistan’s efforts to combat Covid-19, the US Embassy in Tashkent reported.

USAID will be providing funds to prepare laboratory systems for large-scale testing, to prevent and control

infections in healthcare facilities, to improve Covid-19 surveillance and rapid response, to improve case

management of the infected, to combat disinformation about the virus, and to engage local communities so

that they can help the government and health care providers provide timely and accurate information to the

public.

Uzbekistan - Covid-19: New Cases (Bar - RHS) & Deaths (Line - LHS) April 7th


23



Central Bank statement. The Central Bank acknowledged that the depreciation of the ruble and tenge in past

years had an impact on the dynamics of the sum. However, then, unlike the current conditions, the world

economy had growth dynamics or positive significance, which, with high investment and business activity,

supported the growth trends in imports and demand for foreign currency. In addition, the impact of the

devaluation of the currencies of Russia and Kazakhstan on the exchange rate of the som was enhanced by an

increase in credit activity and growth in government spending.

According to the regulator, in the supply structure in the domestic foreign exchange market, along with money

transfers, the share of foreign capital in the form of long-term loans and investments has gradually increased.

The volume of currency sold to banks over the past four consecutive months exceeded the volume of money

transfers. The central bank explains this for several reasons:

First, the expected global recession, along with measures taken against the pandemic, lead to a

decrease in economic activity. At the same time, a decrease in demand for imports and,

consequently, for foreign currency is expected;

Secondly, against the background of an inevitable slowdown in economic growth and measures to

revise the schedule and extend the maturity of loans of industries affected by the economic effect of

coronavirus, it is expected that the demand for credit resources of banks will significantly decrease

compared to the originally projected level;

Thirdly, the formation of an anti-crisis fund, mainly through the attraction of external resources, will

serve as an additional source of foreign exchange supply;

Fourth, the increase in gold prices makes it possible to increase the volume of constant foreign

exchange interventions, "carried out on the basis of the principle of neutrality of gold and foreign

exchange reserves," by 30% compared to last year.

Inflation. In February, the increase in the average level of consumer prices and tariffs for the month amounted

to 0.8%, the report of the State Committee on Statistics of Uzbekistan said. In the first two months since the

beginning of the year, goods and services on average rose 1.4%. In relation to February 2019, prices and tariffs

increased by 13.5%. The leadership in price and tariff growth belongs to food products, which in February

became more expensive by 1.3%, while non-food products added 0.6% in price, and services - 0.3%.

Uzbekistan Som-US Dollar Exchange Rate


24


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

25


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 Indicators (under review - April 7th)

Population GDP, $bln GDP/Cap US$GDP p/Cap US$ Upside, % GDP, % Change

mln 2020E 2020E PPP $ to PPP 2019E 2020E 2021E

Armenia 2.9 $12.9 $4,388 $8,788 100% 5.4% 4.9%

Azerbai jan 10.0 $44.6 $4,471 $15,847 254% 3.0% 3.2%

Belarus 9.4 $58.0 $6,144 $17,168 179% 1.2% 0.9%

Georgia 3.9 $15.8 $4,055 $9,745 140% 5.0% 4.8%

Kazakhstan 18.7 $183.0 $9,786 $24,738 153% 4.5% 3.8% 3.9%

Kyrgyz Republ ic 6.2 $8.2 $1,327 $3,447 160% 4.6% 4.0%

Mongol ia 3.2 $13.6 $4,317 $12,209 183% 5.1% 4.5% 6.0%

Russ ia 146.3 $1,783.0 $12,187 $24,766 103% 1.3% 2.0% 2.9%

Tajikis tan 9.3 $8.2 $882 $3,061 247% 6.3% 5.7%

Turkmenistan 6.0 $52.0 $8,739 $17,129 96% 6.3% 6.0% 5.8%

Ukraine 42.3 $125.0 $2,955 $7,894 167% 2.6% 2.8%

Uzbekis tan 33.9 $58.3 $1,720 $6,253 264% 5.5% 5.8% 6.0%

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

Monetary Indicators (under review April 6th)

2019E 2020E 2021E 2019E 2020E 2021E 2019E 2020E 2021E

Armenia 1.3% 3.0% 5.5% 5.5% 480 500

Azerbai jan 4.0% 6.5% 10.0% 10.5% 1.9 1.9

Belarus 5.1% 5.0% 9.0% 8.5% 2.11 2.20

Georgia 3.0% 2.9% 6.5% 6.0% 2.8 2.8

Kazakhstan 5.4% 4.6% 4.0% 9.25% 8.75% 8.00% 383 385 375

Kyrgyz Republ ic 4.5% 4.8% 4.25% 4.25% 70.0 70.5

Mongol ia 5.2% 8.0% 7.0% 11.0% 10.0% 9.0% 2,718 2,854 2,940

Russ ia 3.0% 3.6% 3.8% 6.25% 5.50% 5.50% 62.0 64.0 64.0

Tajikis tan 6.5% 6.0% 13.3% 13.0% 9.9 10.4

Turkmenistan 9.0% 10.0% 11.0% 2.4% 2.0% 3.0% 3.5 4.2 4.2

Ukraine 6.5% 5.5% 15.5% 13.0% 29.0 31.0

Uzbekis tan 15.2% 12.8% 10,.5% 16.0% 15.5% 14.5% 9,496 9,850 10,100

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

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

Government Finances (under review April 6th)

Budget Balance, % GDP Public Debt, % GDP

2019E 2020E 2021E 2019E 2020E 2021E 2019E 2020E 2021E

Armenia -2.5% -2.5% -7.0% -6.8% 49% 50%

Azerbai jan 6.0% 5.0% 7.9% 10.1% 46% 47%

Belarus 1.5% 1.0% -1.5% -2.2% 56% 58%

Georgia -2.2% -2.0% -9.5% -8.4% 46% 44%

Kazakhstan -2.2% -2.0% -1.8% -2.0% -2.7% -2.2% 19% 20% 21%

Kyrgyz Republ ic -2.8% -2.0% -9.0% -9.5% 56% 57%

Mongol ia -5.3% -5.5% -4.5% -14.0% -16.0% -11.0% 74% 81% 86%

Russ ia 1.8% 0.5% 0.5% 4.3% 3.1% 2.4% 14% 14% 14%

Tajikis tan -4.0% -3.0% -3.0% -2.8% 51% 54%

Turkmenistan -3.5% -3.0% -2.5% -2.6% -2.9% -3.5% 29% 27% 29%

Ukraine 2.5% -2.4% -4.0% -4.3% 65% 65%

Uzbekis tan -1.5% -1.0% -1.0% -6.8% -6.4% -5.8% 24% 26% 29%

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

CA Balance, % of GDP

26


Appendix 3: Russian government actions

Date of ActionMeasures Introduced3-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 fl ights 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 l imits entry by all foreigners until May 1st (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 facil ities 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 fl ights 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 util ities

Source: Macro-Advisory, from Russian media sources

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Appendix 4: Kazakhstan government actions

Appendix 5: Ukraine government actions

Appendix 6: Uzbekistan government actions

Date of ActionMeasures Introduced12-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

Source: Macro-Advisory, from media sources

Date of ActionMeasures Introduced4-Feb Ukraine International Airlines stops fl ights to China

20-Feb Ukraine nationals evacuated from China - quarantined in Poltava, sparking local protests

2-Mar First patient identified, infected in Italy

10-Mar Flights to European countries reduced

12-Mar National quarantine for 3 weeks

Schools closed

Events with more than 200 people banned

Air connections with Italy closed

13-Mar Borders closed

First death

16-Mar President addresses nation, closing bus, rail and air travel, and closes metro

Foreign nationals barred from entry for two weeks

17-Mar All air connections closed

Major cities close all retail outlets except pharmacies, food retail, gas stations, banks

Government announces economic measures

Source: Kiev Post, Macro-Advisory, from media sources

Date of ActionMeasures Introduced21-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 bill ion 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

Source: Macro-Advisory, from media sources

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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

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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.

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

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

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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/

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