BAKU, Azerbaijan, March 14
Trend:
S&P Global Ratings forecast Kazakhstan’s GDP growth will average 3.8 percent over 2022-2025, supported by oil and non-oil sectors, S&P told Trend.
The rating agency noted that country’s economy expanded an estimated 4 percent in 2021, after real GDP contracted 2.5 percent in 2020, spurred by a strong rebound in the services sector and the information, communication, and transportation sector.
“Government stimulus measures continued supporting the economy into 2021. We forecast growth will average 3.8 percent over 2022-2025, supported by oil and non-oil sectors, although threats to the recovery remain from the lingering COVID-19 pandemic. However, the government has made a strong COVID-19 vaccination push with two doses administered to almost 80 percent of the eligible population, up from about one-quarter around mid-year 2021,” the agency said.
The S&P added that the oil sector should provide support to growth in the coming years.
“In 2022, as OPEC+ cuts taper off, we expect production to increase to 1.7 million barrels per day (mbpd). Further production will come online in the Kashagan field in 2023 and the Tengiz oilfield expansion should start producing in 2024 and 2025 after an original start time of 2023. We expect oil production to rise to about 2 mbpd by 2025,” the agency said.
The S&P noted that despite diversification efforts, oil remains the key economic sector in Kazakhstan, directly accounting for about 15 percent of GDP, more than 30 percent of general government revenue, and over half of exports.
“Although oil revenue supports the economy when prices are high, it also exposes Kazakhstan to terms-of-trade fluctuations and fiscal revenue volatility,” the S&P said.
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