Kazakhstan macro: mixed 5M23 results amid puzzling statistics
Given that in recent years, the country’s economy has faced several shocks including the pandemic, protests in early 2022, and Russia’s special military operation, economic trends in Kazakhstan have turned very uneven, being influenced by various base effects. One can also add disputes with Russia on the CPC and scheduled maintenance works on the country’s two main oil fields, which strongly affected the oil industry last year. These effects disrupted activity in various sectors, which was somehow reflected in statistical data but not necessarily accurately. Statistical accounting becomes increasingly challenging in periods of sudden inflation spikes, changes in economic policy, etc., and this is what has occurred in Kazakhstan recently. This year things are supposed to be back to normal, although it is still not yet easy to understand the impact of these past base effects on the country’s economic trends as the country’s statistics are far from being clear and transparent.
The Bureau of National Statistics reported that the short-term indicator (a monthly proxy for an aggregate measure of the country’s economic activity) grew by 4.5% y-o-y in 5M23, which looked decent, although not as good as it could be. In 4M23 and 1Q23, y-o-y growth rates were higher—5.5% and 5.1%. Even though one may expect some deceleration of GDP growth in 2Q23, the Kazakh economy is heading toward over 4% growth this year, with chances for an upside. It is too early to say that May indeed saw some deceleration of economic growth as the official statistics indicated, and the fact that tax collection was good last month and broad based confirms this (tax collection in the local budgets exceeded most optimistic expectations).
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