GDP growth slows in Q1

According to a preliminary estimate, the Kazakh economy lost significant steam in the first quarter, increasing 3.7% year on year. The result was a far cry from the 5.0% expansion recorded in Q1 2023 and marked the worst first-quarter reading in three years.

Kazakhstan’s slowdown in annual GDP growth in Q1 2024 compared to Q1 2023 largely reflected weaker momentum in the agricultural and services sectors. The latter was weighed on by decelerating wholesale and retail trade output and contracting hospitality sector output. That said, the industrial sector rose at a faster clip thanks to stronger mining and manufacturing activity, limiting the overall slowdown. A complete breakdown will be released on 12 July.

Our panelists expect the economy to post a softer expansion over 2024 as a whole compared to 2023, as domestic demand will be depressed by still-elevated inflation and a tight monetary policy backdrop. That said, Kazakhstan will outpace the Common Wealth of Independent States (CIS) average, fueled by accelerating export growth on the back of higher oil production.

Analysts at the EIU commented on the risks to the outlook: “The possible imposition of Western sanctions on Kazakhstan over the re-export of Russian goods presents a downside risk to growth. However, we expect the government to continue to work to mitigate the risks posed by domestic sanctions violations in order to strengthen relations with Western powers. Higher global commodity prices and the further relocation of Russian firms to Kazakhstan are upside risks to the forecast.”

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Kazakhstani private consumption projections for the next ten years from a panel of 12 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable private consumption forecast available for Kazakhstani private consumption.

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