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EBRD improves forecast for growth of Kazakhstan’s GDP

Business Materials 6 November 2019 16:56

BAKU, Azerbaijan, Nov.6

By Nargiz Sadikhova - Trend:

European Bank for Reconstruction and Development (EBRD) forecasts that Kazakhstan’s GDP growth is to reach 3.9 percent in 2019 and 3.6 percent in 2020, Trend reports with reference to the Regional Economic Prospects in the EBRD Regions report published by EBRD.

This is compared to the forecast increase of 3.5 percent in 2019 and 3.2 percent projected in the previous EBRD report published in May.

According to the November’s report, real GDP growth in Kazakhstan accelerated slightly to 4.3 percent year on year in the first nine months of 2019, from 4.1 percent in the same period of 2018, enabled by expansions in construction, trade and transport.

EBRD added that fixed investment increased by 9.7 percent during first nine months of 2019, partly related to the construction of the Saryarka gas pipeline.

“Rising real wages, fuelled by increases in minimum wages and public sector salaries, continue to support private consumption and increased imports,” the report said.

Despite market pressure, EBRD noted, the depreciation of the exchange rate in the first three quarters of 2019 has been limited.

“Rising inflationary pressures prompted the central bank to increase the base rate by 25 basis points to 9.25 per cent in September 2019. Annual inflation remains within the central bank’s target of five-seven percent, reaching 5.3 percent in September 2019. Credit growth remains slow, with loans growing only in the retail sector,” the report said.

According to the report, GDP growth is projected to reach 3.9 percent in 2019 and 3.6 percent in 2020, as social transfers and rising real wages will further sustain domestic demand.

“On the supply side, growth will be mainly driven by non-tradeable services, while the contribution of mining is expected to moderate,” the report said.

The GDP growth forecast named by the National Bank of Kazakhstan is 3.8 percent for the current year and 3.5 percent for 2020.

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