BAKU, Azerbaijan, June 6. Economic growth in Kazakhstan in 2022 will be at the level of 2.8-3.8 percent, Trend reports via the National Bank’s updated forecasts.
According to the bank, dynamic GDP growth rates will be associated with the high indicator recorded from January through April 2022, as well as the expected positive dynamics in all major sectors of the economy until the end of the year.
However, the geopolitical crisis, weakening external demand and restructuring of supply chains will hold back the acceleration of economic growth, the bank said.
The risk of the GDP forecast is the possible problems of access to international markets for Kazakhstan's export supplies against the background of geopolitical uncertainty, which, if implemented, may negatively affect the revision of the GDP growth forecast towards lower rates, the bank noted.
Besides, the bank forecasted that in 2023 the GDP growth will accelerate to 3.5 percent-4.5 percent, and economic growth will be supported by the expected normalization of export and import supply chains, coupled with reduced economic uncertainty, a significant increase in energy production compared to 2022 due to the easing of restrictions under OPEC + and the expected end of the deal of oil-producing countries. Support will also be provided by the continued positive dynamics of domestic demand.
In 2024, according to the bank, economic growth will continue amid the end of the shocks’ negative impact and a significant increase in oil production, taking into account the implementation of large oil and gas projects.
Given the current decision on the base rate, inflation by the end of 2022 has been projected to make up 13-15 percent. The largest increase in prices is expected for food products, taking into account the price dynamics in the external and domestic food markets.
The bank also forecasted significant risks of a sharp rise in prices for regulated utilities in the second half of 2022 due to the end of the moratorium on their increase, as well as rising prices for market services in the context of high inflationary expectations.
This forecast was formed taking into account a set of measures taken by the Kazakh government to control and reduce inflation, the successful implementation of which will allow inflation to reach the lower limit of the forecast.
In 2023, inflation will gradually slow down to 7.5-9.5 percent amid the abandonment of calculations of the high base of 2022, the decision on the base rate, the gradual reduction in external inflationary pressure and the planned implementation of the countercyclical fiscal rule.
In the absence of both external and internal new shocks in 2024, inflation will remain beyond the target corridor, but it has been predicted to slow down to its upper limit.
According to the bank, the main risks of accelerating inflation will be associated with uncertainty amid the geopolitical situation in the world, the likelihood of an outflow of capital from emerging markets in favor of developed ones, the import of external inflation from various countries, including Russia, as well as supply side risks and unanchored inflation expectations.
One of the important risks of the forecast is a possible upward revision of budget expenditures in comparison with the parameters provided for by the law on the state budget of Kazakhstan for 2022-2024, added the bank.
