National Bank improves its outlook for Kazakhstan’s economy

Senior business correspondent
In December 2022, the central bank forecasted a 3-4% growth of the national GDP this year / Kursiv.Media

The National Bank of Kazakhstan has put upward its outlook for the GDP. It is expected that the GDP will grow at the rate of 3.5% to 4.5% over the next three years, according to the bank.

«The economic forecast has been reviewed because of new positive expectations on Kazakhstan’s oil output and export while the country’s trading partners gradually rebound their economies,» the regulator said in a statement.

In December 2023, the central bank of Kazakhstan forecasted that its GDP would add 3-4% in 2023. The regulator also said that «the sustainable increase in internal demand is supported by the state’s incentives and high oil prices.»

«We believe that the positive dynamic of imports driven by fiscal incentives and the current base rate will mitigate the effect of the growth of internal demand,» the regulator said.

The real GDP growth rate in January was 5.6% which shows that consumer demand is quite high.

However, a variety of problems with logistics and transportation that exporters and oil producers are facing might undermine the GDP growth forecast.

According to Galymzhan Pirmatov, head of the National Bank, the country’s balance of payments is going to cross into the deficit zone in two years.

«The current account of the balance of payments is going to gradually switch from the surplus zone to the deficit zone by the end of 2025,» Pirmatov said during a press briefing.

The regulator’s baseline scenario says that the surplus of the current account will decrease from $6.3 billion in 2022 to $131 million in 2023. However, thanks to a time lag this decrease won’t be so big after all, according to the National Bank.

«There is a time lag of about three months between the practical oil exports and the official statistics. If this factor is taken into account, the surplus decrease won’t be so big.  In other words, the National Bank believes that the surplus adjusted to a time lag would decrease from $6.1 billion in 2022 to $2.2 billion in 2023,» Pirmatov stated.

Last year, Kazakhstan reported a 3.1% growth in its economy and 20.3% of inflation. The Eurasian Development Bank is expecting the country’s GDP to increase by 4.2% in 2023, while the Asian Development Bank forecasts a 3.7% growth. 

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