Kazakhstan National Bank raises GDP growth forecast

Kazakhstan Materials 25 August 2023 13:20 (UTC +04:00)
Madina Usmanova
Madina Usmanova
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ASTANA, Kazakhstan, August 25. The National Bank of Kazakhstan has updated its macro forecasts and raised its growth forecast for the country's economy for the period 2024–2025. According to the official message of the regulator, the economy is expected to grow at a rate of 4-5 percent per year, which is an improvement over previous estimates in the range of 3.5–4.5 percent. This year, the expectation of GDP growth in the range of 4.2–5.2 percent remains the same as before, Trend reports.

According to the National Strategy of Transport and Logistics of Kazakhstan, this economic growth will be driven by robust domestic demand, expansion of budget expenditures, and the recovery of the oil sector. At the same time, the report also notes that there are risks associated with Kazakhstan's exports to world markets and possible non-compliance with planned oil production.

In the context of inflation, forecasts have also been adjusted. For the nearest period, the level of uncertainty about price growth has decreased. In the current year, inflation is expected to be in the range of 10–12 percent (compared to the previous forecast of 11–14 percent), 7.5–9.5 percent in 2024 (the previous forecast was 9–11 percent), and 5.5–7.5 percent in 2025 (the forecast remained unchanged).

The National Bank pointed out that without taking into account the direct impact of the increase in housing and utility tariffs, the achievement of the medium-term inflation target of 5 percent is expected by the end of 2025. This is supported by easing external pressures and monetary conditions being in the containment zone.

Some of the risks to the inflation outlook include increased fiscal stimulus, heightened inflation expectations, accelerating inflation in Russia, and a possible increase in global food prices due to the failure of the Grain Deal. Continued reforms in pricing in Kazakhstan's fuel and lubricant markets are also a forecast risk.

Ultimately, Kazakhstan's economy grew by 3 percent in 2022, with inflation at 20 percent.