Kazakhstan macro: Economic growth slows as geopolitical uncertainty bites
After Kazakhstan’s GDP grew in 1Q22 by 4.4% y-o-y, the Bureau of National Statistics preliminarily reported that in 1H22, the economy grew by 3.4%. If so, then it means that in 2H22, the GDP grew less than 2.5% y-o-y. It looks as though the economy continued to slow in July as well, as the short-term indicator (a combined measure of economic activity in several key sectors of the national economy) was up by a mere 4.0% y-o-y in 7M22. There were powerful pandemic-related base effects in Kazakhstan, so in 2Q21 economic growth in the country was quite strong as the initial shock occurred in 2Q20. At the same time, there are clear indicators that in some sectors, such as mining, production contracted. For instance, oil extraction was down in July by 7.3%, although it will likely bounce back in August and beyond as maintenance work on the Kashagan oil field was accomplished in the first half of July.
Recent geopolitical uncertainty may obviously affect Kazakhstan, but so far, the country has been able to weather the geopolitical storm with relatively small losses. Most likely the Kazakh government will continue to remain pragmatic and will be able to skillfully avoid any major shocks going forward. GDP may grow above 3%, probably even closer to 3.5%.
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