By ASTANA. Nov 24 (Interfax) – The National Bank of Kazakhstan maintained the country’s GDP growth forecast for 2023 at the level of 4.2-5.2%, and revised the forecast for 2024-2025.
“The forecast for economic growth in Kazakhstan for 2024 and 2025 has been adjusted. This year, GDP growth is expected to remain in the range of 4.2-5.2%, as previously predicted. However, the forecast for 2024 has been lowered to 3.2-4.2% due to the possible postponement of the start of increased production at TCO until the end of 2024 or to 2025 (Tengizchevroil, the operator of the Tengiz oil and gas field, is implementing a project to increase production). Because of this, accounting for the effect of a lower base, the forecast for 2025 has been raised to 5.5-6.5%. The primary and significant factor contributing to increased forecast risks is the uncertainty surrounding oil production in 2024-2025,” the National Bank said.
Previously, the National Bank had predicted growth in the country’s economy of 4-5% in 2024-2025.
It also revised the inflation forecast for 2023 to 9.3-10.3% from the previously expected 10-12%.
“This revision is attributed to a less significant-than-expected increase in housing and utilities tariffs and a more modest rise in prices for non-food products. The forecasts for 2024 and 2025 remain unchanged at 7.5-9.5% and 5.5-7.5%, respectively,” the regulator said.
The main risks of the inflation forecast for 2024-2025 include increased fiscal stimulus, “unanchored inflation expectations,” a possible increase in food prices due to the low harvest in 2023, as well as the direct effect of increasing utility tariffs. The inflation forecast also does not take into account the increase in VAT discussed by the government of Kazakhstan in 2025 (from 12% to 16%), the National Bank said.
At the same time, the base scenario assumes stabilization of Brent oil prices by the end of this year in the range of $85-90 per barrel due to an extension of OPEC+ production cuts and military operations in the Middle East.
“Under the baseline scenario, in 2024 and 2025, due to moderate demand for energy resources in conditions of weaker global economic growth, a gradual decrease in the price of Brent oil is expected to the level of $85 and $80 on average per year, respectively,” the National Bank said.
The economy of Kazakhstan grew 3.1% in 2022, with inflation of 20.3%.
