Kazakhstan: Economy continues losing momentum in Q2
August 18, 2015
A drop in oil prices and a deeper recession in Russia likely took a heavy toll on Kazakhstan’s economy. A preliminary estimate showed that GDP increased 1.7% on an annual basis in the first half of this year. The reading was less than half the 3.9% expansion registered in the first half of 2014. Kazakhstan reports growth at an accumulated basis and in the full year 2014 overall economic growth was 4.3% (2013: +6.0 year-on-year).
The print showed that the agricultural sector grew 3.0% annually in H1 2015, which came in a tad below the 3.2% expansion registered in H1 2014. In addition, services lost strength and expanded 3.3% year-on-year in the first half this year, which marked a notable deceleration over the 5.4% rise seen in the same period last year. The industrial sector improved and increased 0.6% in H1 2015, which contrasted the 0.8% contraction recorded in H1 2014.
The Ministry of National Economy foresees economic growth of 1.5% in 2015, under a baseline scenario in which the Ministry projects the price-per-barrel of oil to average USD 50. Under a more optimistic scenario, in which the Ministry projects oil prices to average USD 60 per barrel, government authorities expect the economy to increase 2.0%. In its August assessment of the economy, the National Bank of Kazakhstan sees economic growth also at 1.5% this year.
Author: Ricardo Aceves, Senior Economist