Economy grows steadily in March, albeit with some moderation

KAZAKHSTAN - In Brief 17 Apr 2024 by Evgeny Gavrilenkov

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According to the Bureau of National Statistics, the short-term indicator (a sort of a monthly proxy for GDP) grew y-o-y by 4.7% and 4.1% in 1Q24 and March. General trends remained the same, i.e., economic growth remained uneven by sectors. Industrial output increased over the same time frames by 3.8% and 3.0% (both y-o-y). The mining segment delivered a mere 1.8% y-o-y growth in 1Q24, while manufacturing grew faster - by 5.6% y-o-y. Construction activity remained strong having increased by 15.8% and 18.8% y-o-y in 1Q24 and March. Construction statistics appear traditionally volatile and the fact that housing construction reportedly dropped in March by 17.1% y-o-y doesn't say much as in February it grew by surprisingly high 27.0% y-o-y. The Bureau of National Statistics reported that industrial construction grew faster than housing construction in 1Q24 which raises some questions about investment statistics as investments reportedly contracted by 0.8% and 13.3% (y-o-y in 1Q24 and March). It looks as though such short-term volatility is mainly a reporting issue. Similar questions may be raised in relation to the transportation segment, which delivered 13.4% y-o-y growth in 1Q24 but contracted by 2.4% y-o-y in March alone. Agriculture started to rebound in the aftermath of last year's deep contraction. It grew y-o-y by 1.3% in 1Q24 and 2.1% in March. Retail sales were up y-o-y by 4.9% and 5.3% y-o-y over the same two periods. Overall, the economy continued to grow at a decent rate with minor signs of moderation. To some extent, the macroeconomic situation resembles the developments seen in 2023 even on the fiscal side as the tenge remains stable and excessively strong. We...