Kazakhstan Faces Recession

According to Ruslan Dalenov, head of the Ministry of the National Economy, Kazakhstani gross domestic product (GDP) growth will decline 0.9% this year. He has shared this opinion today at the government meeting.

In his statement to the government members, Dalenov specified current macro-economic indicators and state budget parameters in the year 2020.

«Exports will lose $16.3 billion and decline to $35.1 billion in total. The import will drop $7.5 billion to $26.6 billion in total. It’s expected that all these factors will affect GDP growth with a 0.9% decline,» he said. Currently, Kazakhstani GDP is about $155.4 billion, which is $10.7 billion less than expected,” he said.

According to Dalenov, the most negative impacts are volatility on international markets, signs of the global recession, and lower business activity that hit the international economy while governments try to prevent new coronavirus from spreading. Because of the pandemic, oil and metals lost of 65.7% and 15.6% of their value,   respectively.  Global stock indexes declined 20.9% on average. As of April 1, 2020, one barrel of crude oil is traded for $22.

«We took into account these factors and set the average oil price for the April to December period at $20 per barrel. The estimated dollar rate is taken at 440 tenge per dollar and annual inflation in the range of 9-11%,» Dalenov stated.

Due to lower commodity prices, the forecast for crude oil output in the country was also reduced by four million tons to 86 million tons in total. The other commodity sectors including the mining industry, manufacturing, agriculture, construction, and trade will also be suffering from decline.

Earlier, the growth of the Kazakhstani GDP was estimated at 4.1%, so now the Ministry is trying to get more relevant data.