Economic growth accelerated in November amid soaring government spending and credit growth

KAZAKHSTAN - In Brief 13 Dec 2024 by Evgeny Gavrilenkov

---

The Bureau of National Statistics started publishing November monthly statistics and suggested that economic growth accelerated on a y-o-y basis as the short-term indicator (a monthly measure of aggregate economic activity in industry, agriculture, construction, trade, transportation, and communication sectors) grew in 11M24 by 5.6% y-o-y. In 10M23 and 9M23, the y-o-y growth figure was slightly lower (5.3% in both cases). Agriculture and construction delivered the fastest y-o-y growth (13.4% and 10.3% respectively). The former grew y-o-y fast amid last year’s very poor harvest. The latter was strongly supported by steadily expanding credits to households (mortgages including). In the past several months, credits grew from 1.5% m-o-m to 2.3% m-o-m (as of the time of writing the latest available statistics were on October lending). Rapidly expanding credit also supported retail sales. They posted 14.0% and 9.3% y-o-y growth in November alone and 11M24. Increased budgetary spending, including delayed expenditures, also fuelled consumer demand (and inflation as well). The latter remained at 0.9% m-o-m in November and October and will likely look higher in December. The industry grew by a mere 2.7% in 11M24.   Overall, the recently emerged growth model that heavily relies on rapidly increasing public spending and fast bank lending will likely evolve over time into something more natural and sustainable and will be accompanied by slower GDP growth.