Kazakhstan economic review. March 2012 – domestic demand fuels growth
Mar 26. BSR Russia
Basic sector output up 4.6% y-o-y in 2m12. Trade, which rose 14.1% y-o-y, was the major driver of the economic growth at the start of the year, while investment activity saw a more moderate increase (5.5%). External conditions are still favorable for Kazakhstan, as the Urals oil price has surpassed $120/bbl. Thus, economic growth this year is forecast at around 6%. Although industrial output growth will be slightly above 3%, the service sector will see a quicker acceleration.
The CPI rose 0.7% in January-February 2012, versus 3.2% a year earlier. As a result, y-o-y inflation slowed to 4.7% at end February from 7.4% at end December 2011. Though the deceleration has been attributed to very low inflation in the food sector, we believe the trigger had more of a monetary nature. We forecast inflation to come in at a record low of 5.5% in 2012.
Income rising too fast, outstripping labor productivity growth. This does not seem to be a sustainable situation. We expect income and private consumption growth to slow to a single-digit pace.
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Kazakhstan’s flour production increased by 25%, milk by 20%
Mar 27. Caspionet
The production of other food products is comparable to January-February 2011 volumes: the 2012 meat production amounts to 26.2 million tons versus 23.1 tons in 2011 (an increase of 13%), bread stands at 112.9 and 113.4 thousand tons respectively, cereals at 16.7 and 16.3 thousand tons.
Kazakhstan’s flour production has increased by 25% whereas that of milk by 20% over the first two months in 2012, according to the report by the Statistics Agency. Thus, 640 thousand tons of flour was produced in the country from January to February 2012. The production of flour increased by 25% compared to the same period last year. Milk production in Kazakhstan exceeded 64 thousand tons during the same period. At the same time, milk yield dropped to 445 thousand tons in Kazakhstan. This represents only 90% of the level of two months in 2011. Large amounts of milk that is used by milk processing plants are delivered to Kazakhstan from Kyrgyzstan.