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bne February 2018 Outlooks 2018 I 27
institutions. The latest International Monetary Fund (IMF) forecasts project the country’s economy will expand at an annual pace of 3.3% in 2017. The European Bank for Reconstruction and
allow the tenge to drop as low as KZT350 to the dollar, if not further.
The Kazakh central bank cut its policy interest rate by a cumulative 1.75
The decision is aimed at boosting the liquidity of securities and attracting more foreign investors. Kazakhstan has seen foreign ownership of its government debt more than triple
to $517mn since the beginning of 2017, Kazakhstan Central Securities Depository data shows. However, that represents less than 2% of
the total outstanding debt.
The Astana International Finance Centre (AIFC) is due to start its operations in 2018 as a financial services hub to be run as a free economic zone modelled on Dubai’s International Financial Centre. The AIFC's big selling point is its legal regime based on English common law.
Moreover, the AIFC launched a new stock exchange on January 1. The bourse is aiming to attract most of
the major flotations planned under Kazakhstan’s privatisation programme. Sovereign wealth fund Samruk-Kazyna is currently preparing seven state-owned firms for IPOs. The government, which has contended with a plunge in revenues
“It is suspected that Nazarbayev's daughter Dariga, a senate member, is being prepared to take her father’s place”
Development (EBRD) forecasts growth at 3.8% in 2017 and 3.5% in 2018.
Kazakhstan's parliament passed the 2018 state budget in November, targeting
GDP growth of 3.1% and a deficit of 1.1%, compared to its projected growth of 3.4% and a deficit of 2.9% for 2017.
The 2018 budget plan has been formulated with an expected average Brent crude price of $45 and an oil output level of 86mn tonnes, up from 2017’s anticipated 84.5mn tonnes; the growth in output is anticipated mostly thanks to growing output at Kashagan, which is set to reach 380,000 barrels per day by the end of 2018. Kazakhstan’s budget revenues from crude oil exports grew by 53% in the first half of 2017. The revenues were driven by total exports of crude oil and gas condensate, which grew by 46%. As much as 33.2mn tonnes of crude oil worth $12.8bn were exported in the six-month period.
The authorities have been tapping
into the National Fund and draining the central bank’s FX/gold reserves
to support the Kazakh national currency as the tenge weakened, hitting KZT345 to the dollar in November.
It went on to strengthen somewhat against the greenback in December, but some Kazakh analysts believe the measures are unsustainable. Fears
of another major devaluation similar to the August 2015 free-float, which saw the tenge lose around 50% of
its value, have undermined Kazakh citizens’ trust in the national currency. As such, some believe the Kazakh authorities will eventually be forced
to stop intervening in the market and
percentage points during 2017 to the current level of 10.25%. The regulator kept its key policy rate unchanged at
its monetary meeting on November 27, which was the final policy rate review
of the year. The regulator has previously stated it is aiming to maintain the rate at four percentage points above the level of inflation. The central bank attributed the decision to keep the rate unchanged to stable prices, however, annual inflation in October reached 7.7%, close to the upper boundary of the central bank’s targeted inflation rate of 6%-8%. In November,
“The authorities have been tapping into
the National Fund and draining the central bank’s FX/gold reserves”
inflation slowed down again, registering at 7.3% at the end of the month. The central bank previously projected inflation to slow to 5%-7% in 2018.
Kazakhstan intends to start clearing government bonds and central bank notes via Clearstream in 2018, the central bank said on November 28.
from oil, previously said it plans to sell stakes of at least 25% in 45 large state- owned companies. Initially, it hopes to attract investors via the planned IPOs of Air Astana and the world’s second largest uranium miner Kazatomprom in 2018. Kazatomprom has already hired JP Morgan as its lead adviser for a London listing planned for 2018.
Read the full Kazakh Report here:
http://pro.intellinews.com/kazakhstan-outlook-2018-134734/?source=kazakhstan
Read the Uzebkistan Outlook here:
http://pro.intellinews.com/uzbekistan-outlook-2018-134735/?source=uzbekistan
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