Economy continues to grow amid some slowdown in the industry

KAZAKHSTAN - In Brief 16 Aug 2023 by Evgeny Gavrilenkov

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The Bureau of National Statistics reported that in 7M23, the short-term indicator (covering over 60% of GDP and involving six major sectors) grew by 5.3% y-o-y. In 1H23, the figure was 5.6%. Unfortunately, the Bureau provided no m-o-m and y-o-y numbers for individual months. Therefore, detecting any tipping points of the country’s growth trajectory is next to impossible. At a glance, economic growth in the country looks relatively stable – even though sectoral statistics point to some deceleration of economic growth. Even though there are strong base effects and statistical reporting issues, Kazakhstan’s economy can grow by about 5% this year as in 2H22 y-o-y economic growth decelerated. So far, sectoral statistics look not too bad amid investments in production capacity growing by 12.4% y-o-y in 7M22. Retail sales grew by 8.8%, and wholesale trade by 10.0% (also y-o-y in 7M23). Agriculture, construction, freight transportation, and communications grew in 7M23 by 2.6%, 11.0%, 2.4%, and 8.5% y-o-y. Industrial growth moderated in 7M23 to 3.6% y-o-y from 3.8% in 1H23. The mining segment grew y-o-y by 3.8%, while the manufacturing delivered a mere 3.0% in 7M23. A relatively poor result in the manufacturing segment resulted from a 5.0% contraction in metallurgy. The latter accounts for about 37% of manufacturing. At the same time, machine-building grew by 28.7% y-o-y in 7M23. Even though the share of this sub-segment is lower (about 18% of the manufacturing), it grows, and will keep growing amid the ongoing relocation of some foreign companies that operated in Russia to Kazakhstan. Unsurprisingly, the Bureau of National Statistics reported a growing percentage of investment...