BAKU, Azerbaijan, August 1. Additional monetary policy tightening by the Kazakhstan National Bank may happen at the next meetings in September, the forecast of Russian Renaissance Capital investment company said, Trend reports.
Thus, the company noted that Kazakhstan’s GDP grew by 3.4 percent YoY in 6M2022 (after 4 percent in 2021), slowing from 4.6 percent in 5M2022.
“The main growth drivers were trade (which went from double-digit decline in January to double-digit growth in April-May), transport and industrial production. The latter was subdued in June-July due to maintenance works at the largest oil field. The president's initiatives and subsequent expansion of the 2022 fiscal support (following January’s rallies) should support consumption throughout the year, we believe,” the company said.
The company further noted that Kazakh tenge, which is currently trading around KZT477/$ by company’s estimates, may strengthen to KZT450/$ (6 percent appreciation) before the end of the year, and close the next year to KZT470/$ (4.5 percent depreciation amid softer global fuel prices).
“Main vulnerabilities to our forecasts stem from possible
disruption of the oil exports through
the Russian infrastructure which could be conditional on
geopolitical developments,” the company said.
Renaissance Capital also expects inflation in Kazakhstan to remain close to 15 percent this year with a slowdown to 7.7 percent in 2023.
“Importantly, the National Bank of Kazakhstan (NBK) will also have to counterbalance the softer fiscal policy (eased after January rallies) this year. In this regard, we may see additional monetary policy tightening by the NBK at the next meetings in September (with the base interest rate increase to 15 percent) before easing to 10 percent in 2023,” the company said.
