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WB forecasts slow recovery of Kazakh economy

22 July 2016 18:55 (UTC+04:00)
WB forecasts slow recovery of Kazakh economy

The World Bank forecasts slow recovery of Kazakhstan economy, the bank’s report called “Kazakhstan: A Long Road to Recovery,” published on July 22 said.

“Growth is projected to recover gradually over the medium term, but the economy will continue to face substantial headwinds,” the report said.

Under the baseline scenario, GDP growth is expected to remain near zero in 2016, before rising to 1.9 percent in 2017 and 3.7 percent in 2018, as production commences at the Kashagan oilfield, global oil prices rebound, renewed consumer and investor confidence supports the recovery of the non-oil sectors, and inflation eases to an average of 6-8 percent per year. Meanwhile, both fiscal and external conditions are expected to improve.

However, this medium-term outlook is subject to significant downside risks, including risks to the health of the financial sector, sluggish global growth, and the potential for a deeper or more protracted recession in Russia, a further slowdown in China, continued instability in global oil markets, or production delays at the Kashagan oilfield, according to the WB.

The baseline scenario rests on the assumption that oil prices will average around $41 per barrel in 2016, then rise to $50 in 2017 and reach $53.3 in 2018.

Kazakhstan’s GDP growth slowed from 4.1 percent in 2014 to 1.2 percent in 2015, and the economy contracted by an estimated 0.2 percent during the first five months of 2016, according to the WB.

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