NUR-SULTAN

Kazakhstan has projected its gross domestic product (GDP) growth at 3.9 percent in 2022 and has adopted the state budget for the next three years based on average oil price at $60 per barrel.

The Central Asian country’s economy returned to growth in the first half of 2021 after months of contraction supported by the strong performance in manufacturing, pharmaceuticals, construction and the production of construction materials.

In the first half of 2021, GDP grew by 2.3 percent year-on-year, the National Statistics Bureau said, after a contraction of 1.4 percent in the first quarter. In April, Kazakhstan revised its economic growth forecast for 2021 upwards to 3.1 percent, from a previous projection of 2.8 percent.

The government expects revenues at 9.2 trillion tenge ($20.9 billion), spending – at  15.9 trillion tenge in 2022. The budget deficit is projected at 3.3 percent of GDP, down from 3.5 percent expected this year. The government forecasts a decline in the budget deficit to 2.5 percent of GDP in 2024.

The non-resource sector will become one of the main drivers of growth and a key factor in the sustainability of the economy, Aset Irgaliyev, the economy minister, said.

The manufacturing industry is expected to grow at an average 4.1 percent outpacing the growth rates of the mining industry expected to stand at 3.9 percent.

Oil production in 2022 will be 87.9 million tonnes with an increase to 107.4 million tonnes in 2026. The increase in oil production will be driven by Debottlenecking Program of the Caspian Pipeline Consortium to increase its capacity on the Kazakhstan section in 2023.

The state budget for this year is calculated at an average oil price of $50 per barrel.

The International Monetary Fund said in October that Kazakhstan’s GDP was projected to grow 3.3 percent in 2021 and 3.9 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 3,5 percent in 2021 and 3.7 percent in 2022.

In July, Asian Development Bank (ADB) revised Kazakhstan’s economic outlook forecast upwards to 3.4 percent from 3.2 percent in 2021 after consumer spending showed a marked recovery as retail turnover expanded by 6.2 percent from January to April.

The ADB said that Kazakhstan’s 2022 growth forecast would stay at 3.5 percent.