IMF improves GDP growth forecasts in Kazakhstan
By Aynur Karimova
The International Monetary Fund has improved its forecast for GDP growth in Kazakhstan in 2016. The organization reported that Kazakhstan's GDP growth will be 3.25 percent in 2016 while the country's economy will increase by 2 percent.
"Real GDP growth is projected to decelerate to 2 percent in 2015. Weaker demand from Russia and China, lower oil prices, confidence effects, and continuing delays in the Kashagan oil field are the main factors behind the projected slowdown. Next year, growth is projected to pick up to 3.25 percent, driven by gradual recovery in oil prices and external demand," the IMF said on August 5.
Last year, the IMF expected the Kazakh economy to increase to 4.5-5.5 percent of GDP in 2015-2016. In 2014, the economy increased by 4.3 percent.
The IMF experts believe that due to the impact of lower oil prices and continued slow growth in Russia on non-oil potential growth in Kazakhstan still, the medium-term growth outlook is less favorable than projected last year.
"Real GDP growth slowed to an annualized 2 percent during the first quarter of 2015, down from around 4 percent in 2014 and 6 percent in 2013. In addition to weaker external demand, slower growth was driven by the impact of lower income and profitability (resulting from lower oil prices) and confidence effects (reflecting regional developments) on private consumption and domestic investment," the IMF reported.
The IMF also said that the external position of Kazakhstan has deteriorated largely due to the fall in oil prices, with the current account balance turning negative in the second half of 2014, although there has been some improvement in the current account during the first quarter of 2015.
"At the same time, Kazakhstan’s real effective exchange rate has appreciated over the past year, mainly reflecting the depreciation of the ruble and sharp appreciation of the U.S. dollar, against which the tenge is managed. In the face of slowing demand and a more stable exchange rate, headline inflation fell from 7.4 percent year-on-year at end-2014 to 3.9 percent year-on-year at end-June, 2015. In mid-July, following the decline in sovereign spreads and reduced currency pressures, the authorities successfully issued a $4 billion sovereign bond and widened the exchange rate band from 170–188 to 170–198 tenge/dollar," the IMF reported.
Kazakhstan joined the IMF on July 15, 1992.
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Aynur Karimova is AzerNews’ staff journalist, follow her on Twitter: @Aynur_Karimova
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