Kazakhstan’s Economy Growth Is Beyond $ 60 Per Barrel

Kazakhstan's Economy Growth Is Beyond $ 60 Per BarrelThe price of a barrel now – the main surprise. But you can build a forecast. 

While the National Bank notes the deterioration of Kazakhstan’s economy. Data published by the regulator in January-July 2016, indicate steady economic decline.

Still, things are better than a year ago

Kazakhstan’s economy has not yet passed the lowest point of the crisis,

a steady positive growth will be achieved when the cost of a barrel of oil will reach $ 60, the experts of the Research Center for Applied Economics (TSIPE) .

However, economists have noticed that our business is better than a year ago. At least certain types of economic activities. Financial results for the first seven months of 2016 compared to the same period of 2015 shows a slight increase in the construction, transportation, manufacturing and agriculture.

Drivers economic downturn

However, the service sector has become a driver of economic downturn. The deterioration of the business climate is observed in virtually all types of activities.

“For seven months of 2016 transported passengers and freight by a quarter per cent less than the same period of 2015, and the rail is less than 4.6%, the volume of communication services decreased by 4.4%, retail trade – by 0.7%”, – Center experts noted.

In general, the devaluation, inflation and reduced demand serious blow to the service industries.

In addition, experts say that

monetary policy of the country still has a compressed and does not contribute to activation of demand in the economy

“Reduction of the base interest rate to 13% is not given effect, as the growth of loans in July 2016 amounted to only 0.15%”, – said in a research report TSIPE.

Low commodity prices and weak economic activity in Russia and China put pressure on foreign trade indices: January-June foreign trade turnover fell compared to the same period of 2015 by 30.4%, export – by 31.7%, imports – by 28, ,4%. And if compared with the year 2013, the June drop reached 54%, 51% and 57% respectively.

It’s not all bad news. National Bank at the beginning of August 2016, a preliminary assessment of the balance of payments for the 1st half. Exports will be $ 17,115,300,000 US imports -. 12282300000 This is lower by 7666.0 and 4.8816 billion dollars, respectively, compared with the 1st half 2015.

Three scenarios for Kazakhstan

In TSIPE developed three scenarios for the development of the situation in the republic’s economy depends on oil prices.

The baseline scenario assumes that oil will cost 45 dollars / barrel.

Then the exchange rate to the end of the year will amount to 335.32 tenge per 1 US dollar,

inflation will be at 9.1%, and nominal incomes of the population will increase by 9.7%.

Worst-case scenario : oil costs 30 dollars. In this case, GDP will contract by 0.6% and will amount to 99.4%. In industries that produce goods, is now seen as a growth: agriculture – 5.3%, industry – 0.2%, construction – 1.1%. In service industries, the decline: trade – by 3.7%, transport – 4.9%, communications – 2.7%.

The scenario in which the oil is worth $ 30, includes a rate at 378.81 tenge per dollar and inflation at 10.6%.

The optimistic scenario : oil costs 60 dollars.

“In this scenario, for all of the periods is expected to grow in industries producing goods. This will achieve a positive GDP growth of 0.3% for 2016 as a whole.

Tenge exchange rate strengthened and 304.21 will be the end of the year

Inflation will be at 8.2%; nominal incomes increase by 10.7%, “- believe the Center for economists.