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Kazakhstan forecasts reducing oil production amid unstable foreign economic situation

Oil&Gas Materials 2 April 2020 13:52 (UTC +04:00)
Kazakhstan forecasts reducing oil production amid unstable foreign economic situation

BAKU, Azerbaijan, Apr. 2

By Nargiz Sadikhova – Trend:

Kazakhstan has forecasted reducing oil production by 4 million tons to 86 million tons due to unstable foreign economic situation, Kazakhstan’s Minister of National Economy Ruslan Dalenov said, Trend reports with reference to the press office of Kazakhstan’s prime minister.

Dalenov made the statement during a government conference call, during which he reported on the updated macroeconomic forecast for 2020 as part of the socio-economic development forecast for 2020-2024.

Dalenov said that alongside unstable foreign economic situation, the main factors for updating the forecast also include emerging global recession and a slowdown in business activity against the background of protective measures taken to contain the coronavirus.

“Since the beginning of the year, oil prices have decreased by 65.7 percent, metals prices by an average of 15.6 prices, global stock indices have declined by an average of 20.9 percent. As of April 1, 2020, oil process fell to $22 per barrel,” the minister said.

With this in mind, the average oil price for the period from April through December 2020 is defined at $20 per barrel, the estimated dollar rate is 440 tenge per dollar and annual inflation is in the range of 9-11 percent.

“Amid low oil prices, the forecast for oil production was reduced by 4 million tons to 86 million tons. This leads to a decrease in mining production. At the same time, a decrease compared to previously approved growth rates is expected in the manufacturing industry, agriculture, construction and the services sector, including trade,” he said.

Dalenov added that export is expected ti decrease by $16.3 billion to $35.1 billion, import is to decrease by $7.5 billion to $26.6 billion.

“Given the above factors, GDP is expected to decline by 0.9 percent. Nominal GDP is estimated at 69.7 trillion tenge ($155.5 billion), which is 4.8 trillion tenge (10.7 billion) lower than the approved forecast,” Dalenov said.

On March 15, 2020, Kazakhstan’s President Kassym Jomart Tokayev signed a decree introducing an emergency state in Kazakhstan due to the coronavirus outbreak, which came in force from 08:00 (GMT +6) on March 16 and will last till 08:00 on April 15, 2020.

The latest data said that the total number of coronavirus cases in Kazakhstan is 402 people.

On the morning of March 9, 2020, Brent crude plunged 25 percent dropping to its lowest since February 2016 and recording the biggest one-day percentage declines since Jan. 17, 1991.

Trading volumes in the front-month hit record highs in the previous session after a three-year pact between Saudi Arabia and Russia and other major oil producers to limit supply fell apart on March 6, 2020.

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