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34 I Outlooks 2019 bne February 2019
Kazakh Outlook 2018
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Kazakh GDP grew by 4.1% y/y in the first 10 months of 2018. The growth rate stood largely unchanged in comparison to the figures reported in the first nine months, first half and first quarter of 2018 - growth uniformly stood at 4%-4.1% throughout those periods.
Kazakh growth rebounded to 4% in 2017, up from 1% in 2016, and the government attributed the steady growth to a weakening of inflationary pressures and high investment activity.
Kazakhstan has slightly cut its 2019 economic growth outlook to 3.8%, down from the previously anticipated 3.9%, Economy Minister Timur Suleimenov said on November 27. The adjustment
is due to lower expectations for the average Brent crude price - the Kazakh government originally assumed an average world oil price of $60 per
barrel for 2019, but the forecast followed Russia and has been cut to
$55. Per capita GDP is set to amount to $9,400 in 2019, Suleimenov added.
The European Bank for Reconstruction and Development (EBRD) said
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on November 1 that economic growth in Central Asia is expected to moderate in 2018-2019. It gave its latest assessment in its Regional Economic Prospects report.
The report says that for Kazakhstan there is “foreseen a substantial increase in the minimum wage” underpinning private consumption to a certain extent, while fixed investment in the oil and gas sector is also likely to support economic growth. As such, Kazakh growth is expected to remain at 4% in 2018, unchanged from the previous year, but ease to 3.5% in 2019.
The International Monetary Fund (IMF) revised up its 2018 growth projection for Kazakhstan by 0.5pp to 3.7% in the October 2018 edition of its World Economic Outlook, which expects GDP growth in Kazakhstan to slow to 3.1% in 2019.
Economies in Central Asia and the South Caucasus will average annual growth of 4.2% in the coming years, the International Monetary Fund (IMF) said in a preliminary report noting the highlights of an
upcoming Middle East and Central Asia November 2018 outlook.
The rate is less than half the rate of growth seen in the early 2000s. As such, the IMF believes the region needs to strengthen reform efforts to reduce governments’ roles within economies further rather than seeing growth
from growing oil prices as an excuse to relax. The Fund also believes growing global trade tensions pose a risk to the region’s growth. Moreover, it noted that it’ll likely take around two decades on average for the region to reach per capita income levels of emerging Europe.
While growth is steady, the Kazakh currency is less so as it remains exposed to both volatility in oil prices and
the swings of the Russian ruble.
Kazakhstan’s national currency hit KZT380.93 against the dollar on September 12, falling to a 31-month low. The all-time weakest tenge to the dollar rate of KZT382 occurred
in early 2016, thus the currency is on the brink of suffering its weakest ever value versus the USD. The tenge has largely fluctuated around KZT340