Kazakhstan's inflation growth rates and GDP revealed

By Azernews

By Kamila Aliyeva

Inflation in Kazakhstan for the first six months of 2017 stood at the level of 3.7 percent compared with 4.6 percent in the first half of last year.

At the annual level, that is, compared to the same period of the previous year, inflation was at the level of 7.5 percent which is within the target corridor, National Economy Minister Timur Suleimenov said at a meeting of the government in Astana, Kapital.kz news agency reported.

Suleimenov also noted that the average monthly salary in nominal terms increased by 1.9 percent, to 140, 800 tenge, while the unemployment rate remained at the level of 4.9 percent.

The economy continues to grow, but based on analysis over the past five years, about 60 percent of GDP is formed at the expense of the third and fourth quarters.

For example, last year, with a general growth of 1 percent in the first six months of the year, growth was only 0.1 percent, while in the second half of the year it accelerated and amounted to 1.6 percent compared to the same period in 2015.

Therefore, to maintain the current dynamics of economic development, that is, about 4-4.2 percent, taking into account seasonal factors, it is necessary for GDP’s growth in the second and third quarters to remain at the level of 4.1-4.3 percent, respectively, according to the minister.

Suleimenov stressed that the task is very serious, and the government needs to continue jointly with the akimats to implement joint programs in order to attract private investment and stimulate business activity.

In total, according to the minister, in January to June 2017 GDP grew by 4.2 percent. The production of goods grew by 6.2 percent, production of services by 1.3 percent and collection of taxes by 0.3 percent, thus contributing positively to the national economy. Among the sectors, the main economy drivers were industry, construction, agriculture, transport, warehousing and trade. They ensured the growth of the short-term economic indicator by 5.8 percent.

Suleimenov noted the increase by 29.2 percent in the country’s foreign trade turnover, amounting to $29.9 billion.

In the first half of the year, the volume of investments in fixed assets increased by 3.7 percent and exceeded 3.2 trillion tenge.

The minister also noted that investments are formed at the expense of various sources – companies’ own funds, borrowed loan resources, as well as state money. Therefore, the volume of investments in fixed assets is significantly affected by the implementation of state and sectoral programs.

Earlier, Kazakh National Bank forecasted the inflation rate in the country to decrease to 6.5-7 percent in 2017, and to begin to smoothly enter the target range of 5-7 percent in 2018. Slowdown of inflation will occur on account of a decrease in inflation expectations, an enhancement of stability and predictability of the situation on domestic money market, as well as an adoption of moderately restrictive monetary policy in 2017.

The Bank also predicted that economic growth in Kazakhstan will accelerate to 2.2 percent in 2017 and to 4.7 percent for the nine months of 2018. 

Economic growth in this period will be provided due to the growth in domestic consumption amid rising real wages, the growth of investment in fixed assets in the framework of the implementation of government programs to support and diversify the economy, and the growth of production of mineral resources (the Kashagan effect).