Kazakhstan’ s economy growth rates are estimated as 1.5-2% in 2017

Almaty. November 15. Silkroadnews – The growth rate of the economy of Kazakhstan is estimated to stand at 0.2-0.5% in 2016, followed by 1.5-2% in 2017, press service of the National Bank of the Republic of Kazakhstan reported.

“The economy will operate below its potential level till the I quarter of 2018, reflecting domestic demand’s deflationary pressure. External demand is expected to stay within the positive zone of its potential till the middle of 2018 primarily due to acceleration of economic activity in Europe, which will have a positive impact on Kazakhstan’s export potential”, the text says.

In the baseline scenario (with crude price of $40 per barrel), inflation in Kazakhstan is projected to stay within the target range of 6-8% for 2017, with further smooth entry into the corridor of 5-7% in 2018. Inflation slowdown will become a result of stabilization of situation at the world commodity markets, neutral fiscal policy, weak domestic demand and savings behavior of economic agents, including the consequences of the moderately restrictive monetary policy in 2016, the National Bank forecasts.

The principal risk of inflation accelerating is a crude prices drop below $30 per barrel and staying at this level until the II quarter of 2018. With such risk actualization the annual inflation will exceed the target corridor in 2017 and in the first half of 2018. In these circumstances, the National Bank of Kazakhstan will hold a “tough” monetary policy up to the II quarter of 2018.

The additional risk may be in increase in the non-crude deficit of the state budget compared to the planned numbers for 2017-2018.