Kazakhstan Country Report - Issue 5, 2017

  • ID: 4240704
  • Country Profile
  • Region: Kazakhstan
  • 55 Pages
  • Emerging Markets Direct
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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, At the end of October the Economy has seen Growth due to a boost in Oil Production

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.

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 2016 and a $1.5bn deficit in 2017, based on the assumption of a mild rise in oil prices.

Oil production in 2015 declined by 1.7% to 79.6mn tonnes and is expected go down further to 75mn tonnes in 2016, accounting for Kashagan. However, the government expects Kashagan to add between 4mn-7mn tonnes of oil to the country’s production, bringing up the country’s overall production plans to approximately 85mn tonnes.

The IMF has urged the government to pay special attention to agriculture and transportation sectors within its overall modernisation and diversification planning. The institution projects annual growth to reach 2.5% in 2017. Yet, vulnerabilities remain in the financial sector weakness, which should be addressed.

A narrow gauge of GDP, which accounts for 60% of the economy, saw 4.8% growth in the first quarter of 2017. These figures reflect expansion in the transport, telecommunication and trade sectors. Within a month of its operations Kashagan produced over 480,000 tonnes of oil, bringing Kazakhstan’s daily output to approximately 234,000 tonnes in November.

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1.0 Executive summary

2.0 Politics
2.1 USAID to cut 100% of aid to three Central Asian countries
2.2 Kazakh president mulls ban on beards, cropped trousers in move against religious extremism
2.3 Kazakh, Turkmen presidents sign border cooperation agreements
2.4 Kazakh president orders latin alphabet for Kazakh language
2.5 Amnesty International calls for release of Kazakh labour union activist
2.6 Kazakhstan to strip Kazakh IS members of citizenship
2.7 Kazakhstan starts trial in absentia of fugitive banker Ablyazov
2.8 Kazakhstan proceeds with court pursuit of Trump-linked ex-Almaty mayor
2.9 Eurasian corruption levels stagnated in 2016, TI index
2.10 World Bank doing business ranking

3.0 Macro Economy
3.1 Macroeconomic overview
3.2 Macro outlook

4.0 Real Economy
4.1 Industrial production
4.2 Inflation
4.2.1 CPI dynamics
4.2.2 PPI dynamics
4.3 Fixed investment
4.4 Labour and income
4.4.1 Labour market, unemployment dynamics
4.4.2 Income dynamics
4.4.3 Retail sector dynamics

5.0 External Sector & Trade
5.1 Import/export dynamics
5.2 Balance of payments, current account
5.3 Gross international reserves
5.4 FDI

6.0 Public Sector
6.1 Budget
6.1.1 Budget dynamics - specific issues
6.1.2 Budget dynamics - tax issues
6.1.2 Budget dynamics - funding & privatization
6.2 Debt

7.0 FX
7.1 FX issues

8.0 Financial & capital markets
8.1 Bank sector overview
8.1.1 Loans
8.1.2 Deposits
8.1.3 Banks specific issues
8.1.4 Bank news
8.2 Central Bank policy rate
8.3 Stock market
8.4 International ratings
8.4.1 International ratings - specific details of rating actions corp/regional etc
8.5 Fixed income
8.5.1 Fixed income - bond news

9.0 Industry & Sectors
9.1 Sector news
9.1.1 Oil & gas sector news
9.1.2 Automotive sector news
9.1.3 Construction & Real estate sector news
9.1.4 Agriculture sector news
9.1.5 Metallurgy & mining sector news
9.2 Major corporate news
9.2.1 Oil & gas corporate news
9.2.2 Construction and Real estate corporate news
9.2.3 Transport corporate news
9.2.4 TMT corporate news

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