Kazakhstan Investment

Economic growth rises in January–June vs January–March

GDP growth recovers after oil sector disruptions: According to a flash estimate, Kazakhstan's GDP increased 4.1% year on year in January–June, up from 3.0% growth in January–March. The reading suggests the economy accelerated in Q2, following Q1’s downbeat growth due to a VAT hike and headwinds to the oil sector.

Rebound in industrial sector drives improvement in growth: Compared with January–March, readings in January–June improved for the agricultural sector (+4.4% year on year vs +3.2% in January–March), the industrial sector (+3.3% vs 0.0% in January–March) and the construction sector (+15.2% vs +14.8% in January–March). Meanwhile, the reading for the services sector was the same as in January–March (+3.6%). The industrial sector recovered in Q2, with mining contracting by 4.0% in January–June, up from an unprecedented 11.5% fall in January–March caused by a temporary halt of output at the Tengiz oilfield and disruptions at the Caspian Pipeline Consortium (CPC) Black Sea export terminal, which pumps over 80% of Kazakh oil exports.

Renewed attacks at CPC terminal may limit momentum: Looking to Q3, our Consensus is for GDP growth to exceed the H1’s rate, with higher OPEC+ quotas in July and August likely to have boosted oil exports. That said, Ukrainian drone attacks on oil tankers loading at the CPC terminal likely choked shipments, with CPC suspending loadings multiple times since before Ukraine paused attacks in mid-August at the request of the U.S. Meanwhile, freight costs for oil tankers shipping crude from the Black Sea surged amid heightened insecurity, widening the discount of CPC Blend to Brent and squeezing Kazakh export receipts even further.

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Kazakhstani investment projections for the next ten years from a panel of 9 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 investment forecast available for Kazakhstani investment.

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