Baku, Azerbaijan, May 11
By Elena Kosolapova - Trend:
The World Bank forecasts Kazakhstan's GDP growth to hit 2.4 percent in 2017 compared to 1 percent in 2016, the WB Trade in Transition report on Europe and Central Asia said.
GDP growth in Kazakhstan is forecast to reach 2.6 percent in 2018 and 2.9 percent in 2019.
“Economic activity is projected to pick up gradually over the medium term, but growth will remain well below its 2014 level, when the oil price shock hit the economy,” the report said.
The WB noted that a projected increase in oil prices from $55 per barrel in 2017 to about $60-62 in 2018-19 will drive growth in Kazakhstan, supported by increased oil production, as rising output at the Kashagan offshore oil field is expected to more than offset declining output among older oil fields.
According to the report, an improving economy will allow the central bank to maintain its focus on inflation targeting. Inflation in Kazakhstan is expected to decrease to 6.2 percent in 2017, 4.7 percent in 2018 and 4.9 percent in 2019 compared to 14.6 percent in 2016.
“Going forward, the flexible exchange rate regime will help the economy better absorb external shocks,” the report said.
Downside risks to Kazakhstan’s economic outlook include the potential weakening of the external environment, capacity constraints, and the loss of reform momentum.
The economy’s vulnerability to external shocks remains the major source of risk to medium-term growth and poverty reduction, according to the report.
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