If the yearly average oil price sticks to $70 per barrel until the end of 2021, Kazakhstan’s GDP may reach 3.7-4% of growth this year, according to Erbolat Dosaev, head of the National Bank.
Over the first nine months of this year, the country’s GDP had grown by 3.4% while an average oil price was about $68 per barrel. As of today, crude oil Brent futures price for December costs $84.67 per barrel.
As the official noted, the rapid rebound of the global and national economies is based on fiscal incentives from governments and softening of the monetary policy all over the world. Thanks to these factors, the consumer appetite has risen once again, though accompanied by a higher rate of inflation.
“In Russia, which is Kazakhstan’s main economic partner, the inflation rate has reached a maximum over the past five years, 7.4%. Given that our country is becoming more dependent on products imported from Russia (35.4% in 2020 and 40.8% in the first half of this year) the external impact on domestic prices has risen,” he said.
Since the second half of this year, the inflation rate in Kazakhstan has started to grow as a result of the rapid rebound of consumption, ongoing fiscal incentives and some imbalance on several commodity markets.
For example, food inflation in Kazakhstan has risen to 11.5% over the first nine months of this year influenced by different factors; the non-food inflation rate has reached 7.5% because of soaring fuel prices. Inflation of the paid services accelerated to 6.8% as the energy price had gone high.
According to Dosaev, the government expects that while its national development program is underway over the period 2022-2026, the inflation rate will go down to 4-5% over 2023-2024 and 3-4% from 2025 to 2026.
“To achieve that goal the government has to do a lot of work including further diversification of the economy and increasing the country’s independence from imported goods. We are going to cut state costs, make the government finances more stable and lower the inflation rate by implementing new countercyclical fiscal rules next year,” he said.
In June the National Bank announced that it had expected the country’s GDP to reach 3.6-3.9% this year and 4-4.3% in 2022.