NUR-SULTAN

Kazakhstan has projected its Gross Domestic Product (GDP) growth at 3.9 percent in 2022 and has drafted the state budget for next year 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 13 trillion tenge ($30.6 billion), spending – at  15.9 trillion tenge. 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, according to the plan approved this week.

“According to the forecast, at the price of oil at $60 per barrel, the increase of the oil sector’s revenues to the National Fund will rise from 2.5 trillion tenge in 2022 to 3 trillion tenge in 2024,” Aset Irgaliyev, the economy minister, told the government.

He said that the National Fund’s assets were projected to increase from $55.3 billion in 2022 to $61.6 billion in 2024.

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

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.

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, 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.