Kelimbetov says Kazakh economy sustains decent growth in 2011


Kelimbetov says Kazakh economy sustains decent growth in 2011The positive trends in the domestic economy continued to dominate in the first quarter of this year, Minister of Economic Development and Trade Kairat Kelimbetov said presenting the report on the socio-economic development in the first quarter of 2011 and tasks for the second quarter at a governmental meeting on April 26.

“The sustainable economic development was promoted by outside factors within the stabilisation of the external environment and the global economic recovery, as well as the growth in domestic demand, and the governmental support of business activity in the economy and laying ground for post-crisis development,” Kelimbetov said addressing Prime Minister Karim Massimov and other members of the government, the press service of the Kazakh MFA reports.

According to the Minister, the country’s gross domestic product (GDP) grew by 6.5 percent in the first quarter of 2011 compared to the first quarter of 2010. The short-term economic indicator, measured by six core sectors of the economy, during the first three months of the year made 107.1 percent.

Presenting the report, Kelimbetov highlighted the six percent growth of industrial production in the first three months of 2011, while the pace of growth in the manufacturing sector made eight percent, and the mining industry five percent. Growth of production in the spheres of electricity, gas, steam and air conditioning made 6.2 percent, and water supply amounted to three percent.

Mechanical engineering witnessed quite rapid development during the given period, where the volumes of production grew by 22.6 percent. The production in textile industry, in contrast, decreased by 34.4 percent, the production of paper and paper products decreased by 11.4 percent, and the production of refined petroleum products declined by 9.5 percent.

In the first quarter of this year, eight projects within the Map of Industrialisation programme amounting to KZT 7.3 billion were implemented, as a result of which 555 permanent jobs were created.

The volume of gross agricultural output in the first quarter increased by 1.8 percent, which, according to the Minister, was due to the increase in livestock production by the same figure. No changes were recorded in the volumes of crop production.

Moreover, the beginning of the year can also be characterised by positive growth rates in the construction sector, which increased by 3.1 percent, whereas in the same period of 2010 there was a decrease of 8.7 percent.

Furthermore, the growth of investment in housing in the country increased by 42 percent compared to the first quarter of last year.

The overall volume of freight increased by 18.5 percent, communication services grew by 14.6 percent, and retail trade expanded by 11.9 percent.

In regards to the foreign trade, during the first two months of this year the export of goods increased by 36 percent and amounted to US$ 11.6 billion, the largest share of which, or 76.2 percent, made fuel and energy products, as well as metal products accounted for 12.8 percent. Imports amounted to US$ 3.8 billion which is 22.4 percent more than last year. The positive balance of foreign trade turnover amounted to US$ 7.8 billion against US$ 5.4 billion in January-February 2010.

Kazakhstan’s foreign trade with the Customs Union countries in the first two months of this year grew 41.5 percent and amounted to US$ 2.9 billion, making 18.8 percent of total Kazakhstan’s goods turnover. According to the report, exports of goods to Russia rose by 56.1 percent, while exports to Belarus increased 2.6 times.

The negative factor is that inflationary processes also accelerated this year. According to Kelimbetov, the rising prices are a result of external factors such as the worldwide rise in commodity prices, including for oil and metals. In addition, adverse weather conditions, such as drought and fires in some countries have resulted in decrease of production of certain types of foods, including crops. Since the beginning of 2011 the prices of consumer goods and services increased by 3.7 percent, compared to 2.9 percent in the like period of last year.

Assets of the second-tier banks of the country increased by KZT 111.9 billion or 0.9 percent and, according to data from the National Bank, as of April 22 the country’s international reserves made over US$ 71 billion.

The amount of active small and medium-sized businesses as of April 1 made 663,500 which is five percent more than in the like period of 2010. The number of employed in this area amounted to 2.4 million people and increased by two percent, while the output of small and medium-sized businesses grew by 3.3 percent.

The overall unemployment rate in the first quarter of 2011 made 5.5 percent, which is 0.7 percent less than in the first quarter of 2010. The real incomes during the first two months of this year grew by 10.4 percent, where the real wages increased by 7.8 percent.

In order to ensure the sustainable economic development in the second quarter of 2011, particular attention, in Kelimbetov’s words, should be paid to implementation of several major tasks, such as ensuring the planned economic growth of no less than seven percent, implementation of projects under the State Programme for Accelerated Industrial and Innovative Development (PAIID), restoration of banks’ credit activities, ensuring price stability in the domestic market, support for housing construction, and provision of employment.

“Considering the favourable situation in the world commodity markets and the results of functioning of the economy in the first quarter, we believe it is possible to achieve seven percent economic growth this year,” Minister Kairat Kelimbetov said. “According to our estimates, 5.3 percent increase in production of goods and 8.8 percent in provision of services is possible,” the Minister added.

The government seeks to launch 200 projects within the country’s industrialisation map amounting to KZT 745 billion and create 21,000 new permanent jobs in 2011. Commissioning of 52 projects is scheduled for the second quarter of the year.

In order to support the construction industry, a programme of Housing Construction in Kazakhstan for 2011-14 and the Action Plan for its implementation were adopted in late March. In accordance with the programme, six million square meters of housing should be commissioned in 2011, where 21.7 percent of this plan was completed in the first quarter.