(CPV) - Most energy exporters continued to enjoy a boost in export earnings and trade as well as current account surpluses due to increased export volumes and favourable export prices, while energy importers suffered current account deficit.
Among the net energy exporters, Kazakhstan, the Russian Federation and Uzbekistan recorded positive and improved current account balances.
Kazakhstan maintained its current account surplus in 2011, equivalent to 4.4 percent of GDP, owing to a large trade surplus that was boosted by rising oil production volumes. In 2011, the country’s central bank started to buy refined gold products in the country to restock its gold reserves and to ease its exposure to the dollar.
This action pertains to the country’s increasing concern about the sovereign debt crisis in the euro zone and its potential effects on the developed world.
In the Russian Federation, the current account surplus increased to 5.5 percent of GDP in 2011 from 4.8 percent in 2010. High oil prices were the main reason behind the higher surplus as the hydrocarbon sector accounted for around two-thirds of export revenues.
Imports also grew, boosted by the economic recovery and appreciation of the national currency during the first half of 2011. The Russian rouble changed course in the second half of 2011, dropping by more than 10 percent against the dollar.
The current account surplus of Uzbekistan is estimated to be 7.4 percent of GDP in 2011, owing to a large trade surplus and increased remittances from Kazakhstan and the Russian Federation. Favourable global prices for gold, gas and cotton and strong manufacturing exports, especially automotive products, boosted export revenues.
Even though the current account surplus of Azerbaijan fell in 2011, it was still 24.2 percent of GDP. During the year, exports benefited from high oil prices of commodities. The current account of Turkmenistan remained in deficit but improved significantly in 2011, thanks to the rapid rise in gas earnings. Following a disruption of gas exports to the Russian Federation in 2009, the Government of Turkmenistan sought to diversify its gas exports to alternative destinations.
China started importing gas from Turkmenistan through the new Central Asia-China gas pipeline in 2010, with levels set to increase gradually in the coming years. The opening of the second gas pipeline to the Islamic Republic of Iran also contributed to the rise in gas exports.
The increased exports to these two countries have not been large enough to cover the loss of contracted volume to the Russian Federation, but have compensated for the reduction to a great extent. In contrast to the improved current account balances of the net energy exporters, the net energy importers continued to post large deficits in 2011.
In Kyrgyzstan, import growth outpaced export growth in 2011, widening the trade deficit. Rising food and oil prices as well as the recovery of domestic demand contributed to import growth, while higher gold output and prices raised exports.
In Tajikistan, export earnings rose, reflecting the high prices of aluminum and cotton, which accounted for nearly 80 percent of total exports.
However, the growth of export revenues was outpaced by a rise in import costs, driven by higher food and fuel prices in combination with thriving domestic demand. An increase in the workers’ remittances was not enough to fully offset the widening of this gap, resulting in a sharp deterioration of the current account balance, which reverted to a deficit of 4.1 percent of GDP in 2011.
Among the energy importers in the subregion, Armenia and Georgia showed a slight improvement in their current account balance. The current account deficit of Armenia narrowed from 14.7 percent of GDP in 2010 to 12.2 percent in 2011. Higher prices and demand for metal and mineral products increased export revenues and helped to reduce the trade deficit.
Sharply higher remittance inflows from the Russian Federation also helped narrow the current account balance. The current account balance of Georgia improved from a deficit of 12.6 percent of GDP in 2010 to a deficit of 10.4 percent in 2011.
Costs associated with rising import prices of oil and gas were offset by higher prices for the economy’s main exports, such as gold and base metals, an increase in the remittances inflows and surpluses from the services sector./.