Kazakhstan: Economy contracts at moderate pace in 2020
A preliminary estimate released on 16 February revealed the economy was down 2.6% in 2020. The print came slightly above January–September’s 2.8% contraction.
The services sector dropped 5.6% in 2020, leading the fall in GDP (January–September: -6.1%), and likely impacted by lockdown measures. Industrial output also deteriorated, falling by 0.4%, down from the 0.2% logged in Q1–Q3. However, the construction sector gained momentum, expanding 11.2% (January–September: +10.5%). Notably, the agricultural sector also gained steam, growing 5.6% (January–September: +5.0%).
A preliminary estimate released on 16 February revealed the economy was down 2.6% in 2020. The print came slightly above January–September’s 2.8% contraction.
The services sector dropped 5.6% in 2020, leading the fall in GDP (January–September: -6.1%), and likely impacted by lockdown measures. Industrial output also deteriorated, falling by 0.4%, down from the 0.2% logged in Q1–Q3. However, the construction sector gained momentum, expanding 11.2% (January–September: +10.5%). Notably, the agricultural sector also gained steam, growing 5.6% (January–September: +5.0%).
Going into Q1, the economy is likely suffering from coronavirus restrictions and a soft energy sector, with the short-term economic indicator—which follows output indices for key sectors, worth around 60% of GDP—suggesting downbeat activity in January. Despite expectations of a recovery later this year, the lingering effects of the pandemic still pose downside risks.
On the outlook, Artem Zaigrin, economist at SOVA Capital, commented:
“Going forward, we expect the economy to rebound by 3.9% YoY in 2021, with positive rates starting from 2Q21 unless the downside risks from the situation with Covid-19 affect the country’s performance.”