Kazakhstan: Growth decelerates in January–March on weaker external demand
July 15, 2019
A breakdown of GDP by expenditure released by Kazakhstan’s Statistical Institute (SARK) confirmed that the economy grew 3.8% year-on-year in January–March, decelerating from the 4.1% expansion recorded in January–December 2018.
Ebbing global momentum and volatility in commodity markets appear to have taken its toll on the external sector. Export growth more than halved to 5.3% year-on-year in January–March, from a downwardly revised 11.5% increase logged in January–December 2018 (previously reported: +20.3%). Imports, on the other hand, accelerated in the same period (January–December 2018: +3.2% year-on-year; January–March 2019: +5.0% yoy).
Meanwhile, domestic demand underpinned growth in January–March as government consumption recovered from 2018’s slump, following a widening of the fiscal deficit (January–December 2018: -14.0% yoy; January–March 2019: +3.4% yoy). In addition, household spending remained solid largely thanks to the government’s social assistance program (January–December 2018: +5.3% yoy; January–March 2019: +5.0% yoy), while fixed investment growth decelerated to 3.4% from 3.9% in January–December 2018.
The economy is set to lose steam in 2019, owing to challenges on the external front. That said, easing monetary conditions and the stimulus package unveiled by former President Nursultan Nazarbayev—aimed at shoring up consumption and boosting infrastructure development—should both buttress the economy
Author: Nicolás J. Aguilar, Economist