Kazakhstan: Economy grows at the fastest pace in three years in 2017
February 20, 2018
A preliminary estimate shows that economic growth accelerated markedly in 2017 to 4.0%, up from 1.1% in 2016, thanks to buoyant oil production and new transportation projects. The pace of expansion moderated slightly in the 12-month period from the January–September period, however, as the economy grew 4.3% year-on-year over the 9-month period. This indicates a slowdown in the October–December period of the year. GDP growth is reported every three months on an accumulated basis by the country’s Statistical Institute.
While a breakdown by expenditure has yet to be released, looking at a breakdown of GDP by production, there was a broad-based expansion in almost all sub-sectors in the January–December period. However, overall growth in the production of goods slowed in the 12-month period from the 9-month period, while the pace of increase in the production of services picked up marginally. Growth of the industrial sector in the year moderated to 7.1% (January–September: +8.6% yoy), led by a loss of momentum in all sub-sectors. Construction activity also grew at a weaker pace of 1.9% in the whole year, compared to 3.5% year-on-year in January–September.
On the upside, growth picked up in the agriculture, forestry and fishing sector, which grew 2.9% in the 12-month period (January–September: +1.8% yoy). Moreover, there was a slight pick-up in the services sector, which expanded 2.7% in January–December, marginally up from a 2.5% annual expansion in January–September. Wholesale and retail trade grew at a slightly increased pace of 3.2% (January–September: +3.0% yoy), signaling a continued improvement in private consumption.
The robust economic recovery is set to continue into this year, on the back of further boosts to oil output at the Kashagan oil field. According to local media reports, Energy Minister Kanat Bozumbayev recently stated that the target volume of oil output in Kashagan for 2018 is 10.8 million tons. The North Caspian Operating Company, one of the nation’s top oil producers, is looking to optimize processes to reach the full capacity of 370 thousand barrels per day.
Author: Nihad Ahmed, Economist