Kazakhstan macro: Economic growth reportedly decelerated in 2Q22 but will bounce back
The Kazakh president recently mentioned that the country’s GDP was up by a mere 3.4% y-o-y in 1H22, while in 1Q22, it was up by 4.6% y-o-y. Even though the figure quoted by the president had not yet been officially published, the general perception is that economic growth in the country slowed in mid-year. Official national accounts statistics will appear a couple of months from now, while some official GDP growth flash estimates may be published sooner. If we assume that the figure mentioned by President Tokayev is correct, then it appears that in 2Q22, y-o-y GDP growth only slightly exceeded 2.0%.
The National Bureau of Statistics announced that the short-term indicator that reflects economic activity in six key sectors of the Kazakh economy, such as industry, agriculture, construction, trade, communications, and transportation, was up by 4.5% y-o-y in 1H22. In 5M22 and 4M22, it grew by 5.9% and 6.0% y-o-y. In June alone, this indicator was up 5.7% y-o-y, while in May and April, y-o-y growth numbers were lower (5.4% and 2.3% accordingly). Overall, it means that the reported y-o-y deceleration in April 2022 was caused by a strong base effect, given that in April 2021, y-o-y growth reached nearly 12% as the economy bounced back from the recession caused by the pandemic. Even though the mining sector was down in June due to repair works in Kashagan, economic growth in Kazakhstan, in general, remained stable. Budget execution statistics also showed that in June 2022, despite the fact the revenues of the National Fund were relatively low as the oil industry was down y-o-y, in 1H22 as a whole, the financial situation in the country was stable. The government, however, needs to find the right balance between amendments to budgetary spending, as happened this year, which may keep inflation elevated, and the level of inflation that society can tolerate.
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