The latest report on the Regional Economic Prospects published by the European Bank for Reconstruction and Development (EBRD), forecasts Kazakhstan’s GDP growth at 4.5% in 2024, QazMonitor reports.
EBRD’s findings: The May 2024 Regional Economic Prospects report predicts a 5.4% GDP growth for Central Asia, with Kazakhstan showing a 4.5% growth in 2024. On account of higher oil production, a recovery in agriculture, and potential privatizations, the country is expected to accelerate to 5.5% next year. However, the outlook notes the ongoing severe floods that struck the country in late March and April this year. While increased government spending is expected to cushion the blow on overall demand, the full impact of the floods is still being assessed.
Analysts observe that intermediated trade with Russia has stabilized.
Since 2022, public and private investment has significantly increased in transportation, logistics, and export-focused manufacturing in the region.
The EBRD predicts that in 2024-25, Central Asia's primary focus will be on urgent infrastructure upgrades and improving public management practices. Additionally, the countries will work on implementing politically sensitive tariff reforms and initiatives to create comprehensive regional agreements regarding shared resources such as transportation, water, and energy.
Drivers of Kazakh economy: In 2023, Kazakhstan experienced growth primarily due to consumer demand and increased public spending, partly funded by higher transfers from the National Fund. EBRD notes that growth was mainly driven by retail and wholesale trade, supported by rising wages and consumer lending. Although oil export revenues decreased due to lower prices, exports to Eurasian Economic Union countries boosted non-oil activities, leading to higher output and fixed capital investment. This trend continued into the first quarter of 2024, with GDP growth supported by expansion in non-oil sectors like construction, communication, transport, and warehousing.