ALMATY: The commodity-dependent Kazakh economy is experiencing one of its toughest years in over a decade as a result of low oil and other commodity prices together with a slowdown in major trading partners China, Russia and the EU.
Following the plunge in oil prices the Kazakh economic growth eased sharply from 4.2% in 2014 to 1.2% in 2015 and 1% in 2016.
While growth was originally expected by the government to slow down to 0.5% in 2016, it was boosted by an increase in oil production thanks to the launch of the giant Kashagan oilfield at end October.
But after nearly two years of economic slowdown, Kazakhstan is widely expected to turn the corner in 2017. Such projections are visible in both outlooks by international observers and the Kazakh government’s expectations.
Following OPEC’s push to raise world oil prices, the hydrocarbon-reliant Central Asian country’s growth is mainly contingent on gradually ramping up its oil production to its previous levels.
Continued acceleration in growth is expected to be driven by the impact of structural reforms focused on the business climate and public administration and an unlocking of bank lending.
The current account deficit reached $5.2bn.
For the fourth quarter of 2016, bankers expect exports to continue improving thanks to the Kashagan oil project which finally resumed its operations in October, as export revenues from the field will support the balance of payments.
Sberbank projects a current account deficit of $5.5bn-$6.0bn for the full year and a $1.5bn deficit in 2017, based on the assumption of a mild rise in oil prices.