NUR-SULTAN
Kazakhstan’s economy continued to grow and get closer to pre-pandemic levels in the first eight months of this year, supported by a strong performance in communications, construction and trade.
Gross domestic product (GDP) grew by 3 percent year-on-year in January-August backed by 12.9 percent growth in communications, 11.4 percent in construction, 9.1 percent in trade and 5.8 percent in manufacturing, Prime Minister Askar Mamin said.
He said construction progressed at a good pace with 8.9 million square metres of housing commissioned since the beginning of 2021, while the services sector expanded by 2.3 percent, driven by a strong performance in trade and communications.
Growth in the manufacturing industry has been underpinned by an increase in production of pharmaceuticals by 40.8 percent, engineering by 23.9 percent, oil refining by 9.2 percent, leather goods by 8.4 percent, food processing by 4.8 percent, and chemicals by 2.2 percent.
Kazakhstan’s economy first returned to growth in the first half of 2021 after months of contraction. In the first quarter of this year, the economy contracted by 1.4 percent.
Mamin said that given the OPEC+ oil production restrictions, growth in the mining sector remained limited – and the sector contracted by 1.4 percent.
As the COVID-19 pandemic disrupted production as well as demand for oil, OPEC+, a group of OPEC countries and allied producers of which ex-Soviet Kazakhstan is a member, cut output by a little more than 7 million bpd to support prices and reduce oversupply. Earlier this year, members of the group agreed to ease cuts gradually by 350,000 bpd in May, another 350,000 bpd in June and around 450,000 bpd in July.
The cartel has now decided to increase production by a cumulative 400,000 bpd every month starting in August until it reaches the same production levels seen at the end of 2019.
Mamin said investments in fixed capital also grew by 18 percent in the first eight months, with high rates of capital investments in construction, manufacturing, agriculture, trade, information and communication, real estate operations, and transport services.
The country now needs to focus on attracting investment, monitoring investment projects, achieving harvest indicators, procuring fodder, and preparing for the end of the construction season, Economy minister Aset Irgaliyev said.
The International Monetary Fund said in April that Kazakhstan’s GDP was projected to grow 3.2 percent in 2021 and 4.0 percent in 2022. Annual inflation is projected at 6.4 percent this year and 5.0 percent in 2022.
According to the World Bank’s latest projections, the country’s economic growth is expected to rebound in 2021, driven by the resumption of domestic activity, recovery in global demand for oil, continued fiscal support measures, and a successful national inoculation against the COVID-19 virus.
With the continued pace of recovery, the economy is expected to grow within the 3.0-4.0 percent range in 2021 and 3.5 percent in 2022.
In July, the Asian Development Bank revised Kazakhstan’s economic outlook forecast upwards to 3.4 percent from 3.2 percent in 2021. The ADB said Kazakhstan’s 2022 growth forecast would stay at 3.5 percent.