Kazakhstan: slowdown in inflation, high investment activity in H1 2018


ASTANA (TCA) — The Government of Kazakhstan on July 10 reviewed results of the socio-economic development of the country for the first half of 2018, the official website of the Prime Minister of Kazakhstan reported.

Minister of National Economy Timur Suleimenov reported that GDP growth in the first half of the year was 4.1%. In general, the economic recovery occurs amid the continued slowdown of inflationary processes and high investment activity.

“Inflation is steadily narrowing and reached its lowest point in the last three years. From the beginning of the year it was 2.6%,” Suleimenov said.

Investments in fixed assets retain a trend of intensive growth — 25.8%. Industrial production maintains the growth momentum, an increase of 5.2%. The mining industry increased by 5.5%. The dynamics of the manufacturing industry demonstrates stable growth of 5.2%.

Among the processing industries, double-digit growth is maintained in the production of paper products (12%), the chemical industry (11%) and mechanical engineering (17.2%). In other major processing industries, such as metallurgy (3.4%), refining (4.4%) and food production (5.2%), positive growth has been maintained.

The release of agriculture is gaining momentum with an increase of 4%. Strengthening of growth is associated with faster rates of animal husbandry (4.2%).

The growth trend in the construction industry increased sharply to 3.8% for the six months. The growth was caused by the increase in construction of residential buildings, industrial and social facilities, gas and gas pipelines, a gas compressor station, the reconstruction of highways, the runway in the city of Semey, and the modernization of the Shymkent petrochemical plant.

The foreign trade turnover is steadily on a high growth trajectory. For the first quarter it increased by 24.3% or $21 billion. Exports increased by 27%.

The minister said that taking into account the results of the first half-year, there is a potential for ensuring a 4+ percent GDP growth for the entire 2018. To do this, it is necessary to keep the development of the economy at the level of 3.9% in the third quarter and 4% in the fourth quarter.

Chairman of the National Bank Daniyar Akishev said that inflation since the beginning of the year (2.6%) is lower by 3.5% compared to the same period last year. The inflation rate corresponds to the target corridor for 2018 — 5-7%.

Akishev also said that the gold and currency reserves of the National Bank totaled $30.7 billion at the end of May. The total international reserves amounted to $89.9 billion, having increased by $826 million since the beginning of the year.

Sergey Kwan