Azernews.Az

By Kamila Aliyeva

The economic growth in Kazakhstan stood at the level of 4.3 percent in the first eight months of the current year.

This was stated by Kazakh First Vice-Minister of National Economy Ruslan Dalenov at a government meeting on September 19, Kazinform reported.

“After the slight slowdown of 4 percent in July, the economic growth accelerated to 4.3 percent during the eight months of 2017, according to preliminary estimates. Foreign trade has grown by almost a third, while the inflation has slowed down within the target corridor. On this background, Moody's and S&P rating agencies improved the outlook for the sovereign credit rating from negative to stable,” Dalenov said.

The contribution of the non-extractive sector, which amounted to 2.3 percentage points, was recorded, while the contribution of the commodity segment was 1.6 percentage points.

The vice-minister also stressed that high dynamics of growth is observed in four basic industries of six, which are industry, trade, transportation and warehousing, information and communication. The slowdown in growth rates is recorded in construction and agriculture.

In the regional context, according to Dalenov, a positive dynamics of growth in key indicators is registered almost everywhere. Thus, there is an increase from 0.3 percent to 5.6 percent in agriculture everywhere.

“At the same time, in Mangystau and Kyzylorda regions there was a decline in industry - by 0.2 percent and 3.6% percent. In Karaganda and Almaty there is a decrease in construction - by 4.6 percent and 13.7 percent, and investments in fixed assets - by 21.2 percent and 22.7 percent,” he said.

On the background of business activity in the manufacturing sector, there is a gradual entry into the trajectory of stable growth in the service sector. In the eight months of this year, transportation services increased by 4.7 percent, trade and communications increased by 2.9 percent, according to Dalenov.

On July 26, Moody’s Investor Service revised Kazakhstan’s rating to stable from negative. Kazakhstan's economy suffered significantly from the negative oil price shock in 2014-2015, which has resulted in structurally lower prices for the country's main export product and engine of growth, while also weighing on the health of the banking system.

The policy response to the shock and available financial buffers has stabilized the economy and the government's fiscal strength.

Recent government actions to strengthen and recapitalize the banking system help address banks' solvency risks. However, moving forward, still weak asset quality, remaining high deposit dollarization and higher concentration in the banking system signal ongoing contingent liability risk to the sovereign, according to Moody’s.

The Kazakh National Bank previously forecasted the inflation rate in the country to decrease to 6.5-7 percent in 2017, and to begin to smoothly enter the target range of 5-7 percent in 2018.

The Bank also predicted that economic growth in Kazakhstan will accelerate to 2.2 percent in 2017 and to 4.7 percent for the nine months of 2018.

Economic growth in this period will be provided due to the growth in domestic consumption amid rising real wages, the growth of investment in fixed assets in the framework of the implementation of government programs to support and diversify the economy, and the growth of production of mineral resources (the Kashagan effect).

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Kamila Aliyeva is AzerNews’ staff journalist, follow her on Twitter: @Kami_Aliyeva

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