Kazakhstan cuts 2010 economic growth forecast

Jan 22. Reuters. ASTANA

By Raushan Nurshayeva

* Cuts this year’s economic growth forecast
* Better-than-expected GDP growth last year

Kazakhstan cuts 2010 economic growth forecastKazakhstan, its economy slowly recovering from the global economic downturn, cut its 2010 growth forecast on Friday after recording better than expected results for 2009.

Being able to achieve economic growth is a key policy objective for President Nursultan Nazarbayev, whose two-decade grip on power has been closely linked to his nation’s explosive, oil-fuelled economic growth and modernisation.

Central Asia’s biggest economy nosedived sharply during the 2007-2009 economic crisis, prompting fears of broader social discontent among Kazakhstan’s 16 million people.

“We expect gross domestic product growth at 1.5-2.0 percent in 2010. It’s quite a conservative forecast,” Deputy Prime Minister Yerbol Orynbayev told a government meeting.

An earlier estimate stipulated in the 2010 state budget put this year’s growth forecast at 2.4 percent.

Kazakhstan, a vast former Soviet republic, is Central Asia’s biggest oil producer that shares a long border with Russia and China. It is also a key global supplier of uranium and grain.

Separately, Nazarbayev’s administration said the economy expanded 1.1 percent in 2009 in year-on-year terms – a notch better than an earlier forecast of one percent.

In a statement, it said that industrial production grew 1.7 percent last year, also year-on-year, adding that inflation was 6.2 percent in 2009 – both in line with preliminary figures.

Orynbayev, speaking at the government meeting, said industrial production growth was likely to be three percent this year, adding that export conditions were likely to be more favourable in 2010 for Kazakhstan’s key commodities.

“Better conditions on the global markets in 2010 will help our export oriented sectors and ensure growth in the transport sector,” he said, adding, however, that recovery will be slower in domestic focused sectors such as construction.

Kazakhstan’s economy, heavily dependent on energy exports, grew 3.2 percent in 2008 after expanding at an average annual rate of 10 percent between 2000 and 2007 due to high prices for oil and metals – its key export items.

Economists including the International Monetary Fund had earlier forecast a full-year economic contraction because of the deepening effect of the global crisis.

In January-September, gross domestic product (GDP) in Kazakhstan contracted by 2.2 percent, reinforcing those fears.

The Kazakh government has since said that industrial output was recovering and consistently reassured investors that growth was still achievable in 2009.

http://in.reuters.com/article/oilRpt/idINLDE60L0JM20100122?pageNumber=2&virtualBrandChannel=0

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