Kazakhstan Macroeconomic Overview

AERC presents an updated Kazakhstan Macroeconomic Overview

The exceptional events of the past two years show that globalization, which seemed to humanity as a hope for universal prosperity, has begun to fragment, and now there is a clear confrontation between developed countries and the growing global south. The architecture of the global economy with the free movement of goods, capital and people seems to be sinking into oblivion. Countries no longer see it as shameful to resolve their political and territorial issues with the help of military force, thereby contributing to the cultivation of the spirit of imperialism in the northern metropolis.

The global agenda is replete with intensified tensions on almost all continents: the ongoing war in Ukraine, Israel's military operation in the Gaza Strip, unrest in Ecuador, Houthi shelling of the Gulf of Aden and the response of US and British aircraft, tension on the Korean Peninsula. The elections in Taiwan did not add optimism to relations between the world's leading economies - the United States and China.

In turn, the economy of Kazakhstan, according to the preliminary report of the Prime Minister of the Republic of Kazakhstan, showed growth of 5.1% in 2023. The main determinants of growth continue to be construction, trade and communications. A drop in output was recorded in agriculture, while industry and transport are growing at a low rate. The decline in world commodity prices poses a threat to the current account of the country's balance of payments: exports fell for the ninth month in a row, and over the 11 months of 2023 they decreased by 8.5%, while imports increased by 1/5. The trade balance situation may worsen further this year due to another postponement of the launch of the project for the future expansion of the Tengiz oil and gas field until 2025.

In its current review, the AERC upgraded its forecast for Kazakhstan's economic growth in 2024 due to a revision of growth beyond 2023 and expectations that significant fiscal stimulus will continue. According to the aggregate demand model, GDP growth is projected at 4.6% (previously - 4.2%), according to the aggregate supply model, the estimate has also improved - from 4.3% to 4.4%.

The AERC slightly revised its average annual inflation forecast for 2024 to 8.8% (previously 8.6%). AERC increased its fiscal balance forecast from (-)5.7% to (-)5.5% of GDP. The forecast for the current account balance for 2024 is also improved compared to October to (-)5.7% of GDP (previously - 6.0%) amid expectations of higher export growth rates and lower import growth rates compared to October forecast