Kazakhstan: Economy picks up marginally in the first three months of the year
A breakdown of GDP by expenditure released by Kazakhstan’s Statistical Institute on 13 July confirmed that the economy grew 4.1% year-on-year in the January–March 2018 period, slightly up from the 4.0% expansion in the January–December period of last year. Strong oil production and the climb in global oil prices have helped to sustain the economic recovery, with growth bouncing back to levels seen before the 2015–2016 crisis.
On the domestic side, private consumption picked up, growing 3.9% in January–March, up from 1.5% in the January–December 2017 period. Moderating inflationary pressures and declining unemployment have helped shore up household consumption. On the other hand, growth in fixed investment lost traction, dropping from 4.0% in the January–December period to 3.2% in the January–March period. Moreover, government spending contracted sharply in the first three months of the year, contrasting the 2.1% upturn in the previous twelve months, as the government gears itself towards fiscal consolidation.
The external sector showed a marked improvement, with exports accelerating notably. Exports surged 10.7% in January–March, up from 2.2% in the January–December 2017 period. Imports rebounded, rising 2.8% in the first three months of the year and contrasting a 4.5% drop in the previous 12-month period. As exports outpaced imports, the net contribution of the external sector to growth was positive. Strong sustained oil production at the Kashagan oil field, encouraged by the upturn in oil prices, should keep the economy growing at a robust pace, although the implementation of fiscal rules will cap public spending on oil.