Kazakhstan macro: GDP growth beat expectations last year but is likely to decelerate in 2024
The Bureau of National Statistics of Kazakhstan published its preliminary GDP numbers on the production side for 2023. The end-use statistics will be published at a later date. It could well be the case that at some point the Bureau may somehow modify the quarterly GDP data as the annual figure is preliminary. So far, the statistical agency has left the quarterly numbers untouched, and it remains to be analyzed and double-checked to see if the available statistics are mutually consistent and reliable. The published data suggest that economic growth seemingly accelerated in 4Q23 as GDP grew by 4.9% y-o-y in 9M23, while the annual growth figure is 5.1%. The Bureau of National Statistics suggested that the country's nominal GDP reached nearly KZT 119.3 trln, which was a significant increase relative to previous periods. Kazakhstan's dollar-denominated GDP exceeded $261 bln last year. The National Bank of Kazakhstan, in its statement following the decision to cut the base rate by 50 bps to 14.75%, mentioned it now expects GDP to grow 3.5-4.5%, i.e., well below last year's rate. The government has more ambitious expectations for real GDP growth.
The NBK’s views on decelerating GDP growth have certain grounds. As tax revenue collection remained weak in January (only 5.2% of the annual target in the case of the consolidated budget), large-scale budgetary amendments do not appear likely. At some point the government will need to orchestrate some correction of the USD/KZT rate. If this happens, then inflationary pressure may rise. Therefore, the NBK may put further base rate cuts on hold. The corporate sector will remain largely unaffected by still high policy rates, while household consumption growth will likely moderate.
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